Question Details

What amount of vacation liability would be reflected on the 2010 and 2011 balance sheets 




1.	Jenks Corporation acquired Linebrink Products on January 1, 2010 for $4,000,000, and recorded goodwill of $750,000 as a result of that purchase. At December 31, 2010, Linebrink Products had a fair value of $3,400,000. The net identifiable assets of the Linebrink (excluding goodwill) had a fair value of $2,900,000 at that time. What amount of loss on impairment of goodwill should Jenks record in 2010?
A)	$     -0-
B)	$250,000
C)	$350,000
D)	$600,000

2.	Sodium Inc. borrowed $175,000 on April 1. The note requires interest at 12% and principal to be paid in one year. How much interest is recognized for the period from April 1 to December 31?
A)	$0.
B)	$21,000.
C)	$5,250.
D)	$15,750.

3.	Vista newspapers sold 4,000 of annual subscriptions at $125 each on September 1. How much unearned revenue will exist as of December 31?
A)	$0.
B)	$333,333.
C)	$166,667.
D)	$500,000.

4.	Purchase Retailer made cash sales during the month of October of $132,600. The sales are subject to a 6% sales tax that was also collected. Which of the following would be included in the summary journal entry to reflect the sale transactions?
A)	Debit Cash for $132,600.
B)	Credit Sales Tax Payable for $7,506.
C)	Credit Sales for $125,094.
D)	Credit Sales Tax Payable for $7,956.

5.	A company gives each of its 50 employees (assume they were all employed continuously through 2010 and 2011) 12 days of vacation a year if they are employed at the end of the year.  The vacation accumulates and may be taken starting January 1 of the next year.  The employees work 8 hours per day.  In 2010, they made $14 per hour and in 2011 they made $16 per hour.  During 2011, they took an average of 9 days of vacation each.  The company's policy is to record the liability existing at the end of each year at the wage rate for that year. What amount of vacation liability would be reflected on the 2010 and 2011 balance sheets, respectively?
A)	$67,200; $93,600
B)	$76,800; $96,000
C)	$67,200; $96,000
D)	$76,800; $93,600




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