1) An entity is most likely to initially account for an asset retirement obligation (ARO) by:

a. Recognizing the fair value of the liability using an expected present value technique

b. Recognizing a liability equal to the sum of the net undiscounted future cash flows associated with the ARO

c. Decreasing the carrying amount of the related long-lived asset

d. Decreasing the liability for the ARO to reflect the interest expense

2) On November 1, 2018, Mason Corp. sold $800,000 of its ten-year, 8% term bonds dated October 1, 2018. The bonds were sold to yield 10%, with total proceeds of $700,000 plus accrued interest. Interest is paid every April 1 and October 1.

What amount should Mason report for interest payable in its December 31, 2018 balance sheet?

a. $17,500

b. $16,000

c. $11,667

d. $10,667

e. $20,000

3) Puppy Company includes one coupon in each bag of dog food it sells. In return for 3 coupons, customers receive a toy dog that the company purchases for $1.20 each. Puppy Company's experience indicates that 50% of the coupons will be redeemed. Information for 2012 is as follows:

Bags of Dog Food Sold: 100,000

Toys Purchased: 12,000

Coupons Redeemed: 30,000 The amount of estimated liability for premiums on the 12/31/12 balance sheet is:

a. $6,000

b. $8,000

c. $18,000

d. $35,000

e. $48,000