Benny Company has 70 employees who work 8-hour days and are paid hourly. On January 1, 2017, the company began a program of granting its employees 10 days of paid vacation each year. Vacation days earned in 2017 may first be taken on January 1, 2018. Information relative to these employees is as follows: Benny has chosen to accrue the liability for compensated absences at the current rates of pay in effect when the compensated time is earned. What is the amount of expense relative to compensated absences that should be reported on Benny's income statement for 2017? a. $0. b. $142, 800. c. $126,000. d. $114, 800. Thompson pays a weekly payroll of $255,000 that includes federal taxes withheld of $38, 100, FICA taxes withheld of $23, 670, and 401(k) withholdings of $27,000. What is the effect of assets and liabilities from this transaction? a. Assets decrease $255,000 and liabilities do not change. b. Assets decrease $193, 230 and liabilities increase $61, 770. c. Assets decrease $193, 230 and liabilities decrease $61, 770. d. Assets decrease $166, 230 and liabilities increase $88, 770. Endicott Processes is involved with innovative approaches to finding energy reserves. Endicott recently built a facility to extract natural gas at a cost of $12 million. However, Endicott is also legally responsible to remove the facility at the end of its life of twenty years. This cost is estimated to be $17 million (the present value of which is $6.5 million). What is the journal entry required to record the asset retirement obligation? a. No journal entry required. b. Debit Natural Gas Facility for $17,000,000 and credit Asset Retirement Obligation for $17,000,000. c. Debit Natural Gas Facility for $5,000,000 and credit Asset Retirement Obligation for $5,000,000. d. Debit Natural Gas Facility for $6, 500,000 and credit Asset Retirement obligation for $6, 500,000. Benson provides extended service contracts on electronic equipment sold through major retailers. The standard contract is for four years. During the current year, Benson provided 42,000 such warranty contracts at an average price of $162 each. Related to these contracts, the company spent $800,000 servicing the contracts during the current year and expects to spend $4, 200,000 more in the future. What is the net profit that the company will recognize in the current year related to these contracts? a. $1, 804. b, $6,004,000. c. $800,000. d. $901,000