Case 3

Riley Company promises to pay Janet Anderson or her estate $150,000 per year for the next 10 years,

even if she leaves the company or passes away to try to induce her to stay with the company. Riley

Company wants to properly record this transaction as deferred compensation, but is unsure how to record

the cost. In addition, Riley Company purchased a whole life insurance policy for Janet, naming the

company as the beneficiary. Reed Company wants to determine if it can offset the cash surrender value

of the life insurance policy against the deferred compensation liability.

Week 2 summarize the background o the case and indicate any assumptions are made regarding the case. Define the problem statement and research question(s).

Week 3 identify the key terms in your case, and why each is relevant to the case.