You work as an accountant for regional CPA firm of Cash and Green. Your supervisor asked you to conduct research for three unrelated clients.

1. The Phelps 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 Phelps record and measure such a liability as of June 30th?

2. On January 1, the Mo Farah Company agreed to purchase all of Staley Bears interest in the company for $30 per share. Staley, who owns 15%and a controlling interest of Mo Farah previously threatened to engage in a hostile takeover attempt of Mo Farah. For the last two years, Mo Farahs stock traded from about $12-23reaching $23 on December 31 of last year. How should Mo Farah record this transaction?

3. As of January 1, the Singletary Company owes the First Bank $350,000 which is due on December 31. Since Singletary seems unable to repay the note, the bank agreed that Singletary can settle this balance by agreeing to make four, annual installments on each of the next four years, provided that it adds a due on demand clause to the note. Specifically, the lender will do its best not to call the note provided that no adverse significant shift in operations occurs." However, First Bank has the sole discretion to ascertain if these adverse conditions arose, and then to call the note due immediately. How should Singletary account for this above situation?

Required:

a) Provide responses for each independent case on the appropriate accounting treatment.

b) Support your responses with code sections from the FASB Accounting Standards Codification (ASC).