Bayler leasing company agrees to lease equipment to Lion corp. on Jan 1, 2019, both Bayler and Lion follow IFRS. The following information relates to the lease agreement:

1. the lease term is 7 years, no renewal,
2. Bayler acquired the equipment this day Jan 1, 2019 for $560,000 cash, the useful life 10 years
3. at the end of the term the equipment to be returned to the Bayler with guaranteed residual value of $40,000
4. the lease agreement require annual rental payments beginning of Jan 1 each yaer
5. Bayler charges 10% on all it is transactions and it is the same rate that Lion can borrow from their Bank.

Questions:

Considering this as Financing type (Capital) Lease, answer the following questions:

1. Calculate the amount of the annual rental (lease) payment
2. If Dec 31 is the fiscal year end for Lion co., prepare the journal entries that Lion would make in 2019 and 2020, Lion did not use reversing entries
3. From the information you have calculated and recorded, identify all balances related to the lease that would be reported on Lion Balance sheet on Dec 31,2020

For water to be considered safe, the average amount of radioactivity in the water has to be less than 5 pCi/L (picocuries per liter). A local environmental group wants to be sure that the local water company provides the local university with safe water. If the water is determined to be unsafe, the local water company must determine the cause and correct it. A random sample of water samples from the university is obtained and the amount of radioactivity in each is measured.

a) State the null and alternative hypotheses. Write '≤' as '<=', '≥' as '>=', and '≠' as '<>'.

b) In context, explain what the Type I error is.

c) In context, explain what the Type II error is.

d) Which error is worse for the environment, a Type I error or a Type II error? Why?

e) Which error is worse for the water company, a Type I error or a Type II error? Why?

Axelrod Ltd. wishes to accumulate its cash so it will have $8.06 million sometime in the future. Independent of any financial information provided for Axelrod in its financial statements, assume they invest $1.15 million annually over 5 years, starting today, assuming a 4.5% per annum return. They stop investing after their 5th deposit of $1.15 million. They will then leave the accumulated funds in their account to grow until it reaches their goal of $8.06 million How many years in total will it take to reach their goal?

a. How many years from today will it take Axelrod to reach its goal? (Round up to the nearest year.) (4 points)

b. In a separate matter, the CEO, Bobbie Axelrod, wants to determine how much he must save for his son’s university education. His son will start university in 3 years and the cost is estimated to be $34,000 per year over 4 years (withdrawn at the beginning of each year). Assume Bobbie makes his first deposit into a savings account in one year and wants to make 3 equal annual deposits in total. If he earns 3% annually on his savings account, how large must his annual deposit be? (Round to the nearest dollar.) (4 points)

Axelrod Ltd. wishes to accumulate its cash so it will have $8.06 million sometime in the future. Independent of any financial information provided for Axelrod in its financial statements, assume they invest $1.15 million annually over 5 years, starting today, assuming a 4.5% per annum return. They stop investing after their 5^th deposit of $1.15 million. They will then leave the accumulated funds in their account to grow until it reaches their goal of $8.06 million How many years in total will it take to reach their goal?

a. How many years from today will it take Axelrod to reach its goal? (Round up to the nearest year.) (4 points)

b. In a separate matter, the CEO, Bobbie Axelrod, wants to determine how much he must save for his son’s university education. His son will start university in 3 years and the cost is estimated to be $34,000 per year over 4 years (withdrawn at the beginning of each year). Assume Bobbie makes his first deposit into a savings account in one year and wants to make 3 equal annual deposits in total. If he earns 3% annually on his savings account, how large must his annual deposit be?  (Round to the nearest dollar.) (4 points)

1. During an interview, what could you do to increase your confidence?
2. What are you personal strengths and weaknesses? How would you address these in an interview?
3. What are three things you can do during an interview to make a positive impression?

You are the audit manager of Overseas Explorer Ltd (OEL), which acquired the small proprietary company Local Pty Ltd (Local) on 30 June 2018. The price of the acquisition was agreed at $5 million, on the condition that OEL is satisfied with the financial records of Local. As Local is a small proprietary company, it has not prepared statutory financial reports or undergone an audit since its incorporation in 2016. However, Local has agreed to allow your firm, which is the auditor of OEL, to access its books and records. The CEO of OEL, Wendy Champion, has requested that your firm provide assurance on the following three items:

 The management accounts for the year ended 30 June 2017

 All transactions occurring from the date negotiations commenced until the settlement date, to ensure that all transactions were within the normal course of operations

 The financial report prepared at the acquisition date of 30 June 2018

In order to clarify your responsibilities, you requested that OEL indicate the level of assurance that they require for each item. Wendy replied that the financial report as at acquisition date is very important, as are the transactions since negotiations commenced, but that she is willing to have less work done on the previous year’s management accounts.

Required: Indicate the type of engagement that will most likely be undertaken for each of the three tasks and the level of assurance to be provided. Explain your selections. (10 marks, maximum 250 words)

In this week's discussion your are going to be the CEO of a company.  In anticipation of the upcoming quarterly disclosure of profits, you prepare your Board of Directors for the challenge that cost-push inflation having on profits.  Please make yourself CEO of only one of these hypothetical companies.

All America Grocery Inc - We serve communities in the middle of the income market providing low prices for all basic grocery needs. Our modest income consumers expect goods deals on good quality foods.  The Covid-19 pandemic has put upward pressure on the price of everything we sell. We have also experience rising cost in every aspect of our operation as we have to put extra resources in to protecting both our employees and the public. We are both fortunate and unfortunate that the price elasticity of demand for food is .20.  

Very Big US Auto - Very Big US Auto is one of the oldest and one of the largest auto manufacturers of autos in the US.  Very Big US Auto's supply chain is highly dependent components manufactured in China and assembled in the US. Like the US economy the Chinese continue to have major stoppage in production due to Covid-19. Additionally manufacturing facilities like ours must take extra precaution to keep workers safe. Costs are rising we are experiencing rising costs.  Very Big US Auto know that demand is relatively elastic with a price elasticity of demand of 1.2. We also know that the supply of auto is relatively inelastic and all our competitors are facing the same cost increase.

Big Time Entertainment - Big Time Entertainment is a nationwide firm providing movies, arcades and other entertainment venues such as bowling and roller skating. Our operations have been heavily impacted during the Covid-19 pandemic. On reopening we have been faced with a host of regulations that have greatly increased our cost of operation, everything to operating far below our optimal number of patron to higher cost for cleaning and other measure to protect the public and our employees. Price elasticity of demand is 1.6 and we are also face with competitors, online entertainment and gaming, that are not experiencing these cost pressures.

Now explain:

• Is the demand curve for your product relatively elastic, inelastic or unitary elastic?  Demonstrate for your company's product, by how much the quantity demanded will change if you pass on a 10% increase in cost. In other words, show your calculation of the percentage change in the quantity demanded given a 10% change in your price. You must provide a calculations showing the percentage change in quantity demanded.
• Given your company's and price elasticity of demand and the industry supply/competitive environment you face prepare a statement for your board as to the potential impact on profits.   Who will pay the larger share of the cost increases, your firm or your customers?

For the year ended Dec 31, 2020, King Inc. reported pretax accounting income of $800,000. Select information is listed below:

In 2020, the company started issuing stock options to its employees. The compensation expense related to stock options was $80,000. The compensation expense related to stock options is not deductible for tax purpose until the employees exercise the options in the future.

2) In 2020, the company purchased a piece of equipment with a cost of $500,000. For financial reporting purposes, the company used the straight-line method over a 5-year service life with no residual value expected. For tax purposes, the equipment was scheduled to be depreciated by $160,000, $140,000, $120,000, $50,000 and $30,000 in years 2020 through 2024, respectively.

3) During 2020 loss contingency accrued for financial reporting purpose was $45,000. The loss contingency was due to the pending patent lawsuit brought by its long-time competitor, Queen Inc. The payment for the lawsuit is expected to be paid in 2022.

4) In 2020, the company incurred $10,000 from municipal bonds. The interest earned on municipal bonds are exempted for tax purposes.

King Inc.’s income tax rate is 20%. At January 1, 2020, the deferred tax asset balance was $40,000 and the deferred tax liability was $5,000.

Required:

a) What is taxable income for 2020?

b) What s the ending balance of DTL on 12/31/2020?

c) What is the ending balance of DTA on 12/31/2020?

d) Prepare journal entries to record income taxes in 2020

e) Prepare 2020 income statement, beginning with"Income before income taxes". You need to reconcile current income tax expense with total income tax expense in this section.

On December 31, 2019, of the current year Company A physically counted $1,500,000 of inventory. The following additional information is also available:

Company A sold goods for $250,000 to Dog Enterprise. Company A had originally purchased the goods for $175,000. The order was shipped to Dog Enterprise FOB shipping point on December 28, 2019 and arrived at Dog Enterprise facility on January 2, 2020.

Question 1: Does Company A adjust or not adjust the physical count for the in-transit goods? Explain.

COMPANY A purchased goods costing $40,000 from vendor Joe's Hardware. Joe's Hardware shipped the goods to Company A FOB shipping point on December 29, 2019 and the order was delivered on January 1, 2020 The shipment was a rush order that was supposed to arrive by December 31.

Question 2: Does Company A adjust or not adjust the physical count for the in-transit goods? Explain.

Company A sold goods for $250,000 to Door Company. Company A had originally purchased the goods for $175,000. The order was shipped to Door Company, FOB Destination on December 28, 2019 and arrived at Door Company facility on January 4, 2020.

Question 3: Does Company A adjust or not adjust the physical count for the in-transit goods? Explain.

Company A purchased goods costing $30,000 from vendor Kitchen Company. Kitchen shipped the goods to Company A FOB destination on December 30, 2019 and the order was delivered on January 3, 2020.

Question 4, does Smith adjust or not adjust the physical count for the in-transit goods? Explain.