Case 13: The Heather Companys fiscal year ends on June 30. Its employees (with at least three months of experience) are entitled to 12 paid sick days annually for each calendar year beginning on January 1. An employee not taking his/her earned sick days would receive payment thereon on December 31 of that year. How should Heather record and measure such a liability as of June 30th?

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Case: 5 Income sourcing- international tax (advanced)

Hidetoshi was aworld-renowned rock star from NewCountry. Sony-USA Records contracted with Hidetoshi to produce records.Sony-USA Recordsretained allintellectual property rights in the recordings.The contract grantedHideyoshi payments or "royalties" based upon future sales of recordings. Hidetoshi paid taxes on the payments in NewCountry as royalties. The U.S.- New County treaty exempts royalties from tax in the U.S. However, NewCountry tax treaty, did notdefine royalties orcompensation for personal services. The IRS has toldHideyoshi, his contract with Sony-USA generates personal service income in the United States. Advise Hidetoshi.

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Case 4: On April 15, the City of Old Putz invests its "available" excess cash with an investment broker. The investment broker then purchases 90 day commercial paper from a set of "blue chip" companies. On June 30, the lastday of the City'sfiscal year, theCity planned to "rollover" the commercial paper when they mature. However, interest rates fell dramatically in late June resulting in a lower value for the "maturing" commercial paper. Moreimportantly, the City now expects toreceive amuch lowerreturn on its investment after reinvestment.Should the City make anydisclosures or adjustments regarding these transactions?

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