Pronghorn Co. provides the following information about its postretirement benefit plan for the year 2020.

Prepare a worksheet inserting January 1, 2020, balances, showing December 31, 2020, balances, and the journal entry recording postretirement benefit expense. (Enter all amounts as positive.)

The following information is available for Ivanhoe Company. 1. Purchased a copyright on January 1, 2020 for $62,400. It is estimated to have a 10-year life. 2. On July 1, 2020, legal fees for successful defense of the copyright purchased on January 1, 2020, were $17,784.

Prepare the journal entries to record all the events related to the copyright during 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
Jan 1st 2020, July 1st, 2020, Dec 31st, 2020

At December 31, 2021, an impairment test is performed on the copyright purchased in 2020.

It is estimated that the net cash flows to be received from the copyright will be $62,400, and its fair value is $59,280. The accumulated amortization at the end of 2021 was $15,288. Compute the amount of impairment, if any, to be recorded on December 31, 2021. (If there is a loss on impairment, then enter amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Purple Co. began business on January 1, 2020. The following items caused the only differences between pretax financial income and taxable income.

1. On January 2, 2020, heavy equipment costing $800,000 was purchased. The equipment had a life of 4 years and no salvage value. The straight-line method of depreciation is used for book purposes and the tax depreciation taken each year is listed below:

                                                      Tax Depreciation                                        

              2020              2021                 2022                   2023                Total    

            $360,000         $180,000          $140,000          $120,000          $800,000

2. On January 2, 2020, $360,000 was collected in advance for rental of a building for a two-year period. The entire $360,000 was reported as taxable income in 2020, but $180,000 of the $360,000 was reported as unearned revenue at December 31, 2020 for book purposes.

3. In 2020, the company had an accounts receivable of $420,000 for goods that had been delivered to the customer in 2020. It will be collected in 2021.

4. Purple Co. deducts insurance expense of $210,000 for tax purposes in 2020, but the expense is not yet recognized for accounting purposes. In 2021, 2022, and 2023, no insurance expense will be deducted for tax purposes, but $70,000 of insurance expense will be reported for accounting purposes in each of these years.

The enacted tax rates existing at December 31, 2021 are:

2020                 20%                             2022                 30%

            2021                20%                              2023                30%

                                                                        2024                30%

Instructions:

1. For items 1)-4), indicate whether it involves a deferred tax asset, deferred tax liability, or permanent difference.

1):                    2):                    3):                    4):                    

Purple’s taxable income for 2020 was $900,000. Prepare the journal entry to record income tax expense, deferred taxes, and the income taxes payable for 2020. Show your work.

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.

Question 1 – High Technology Stocks [10 marks]

A random sample of high technology stocks was followed over a month to determine whether there has been an overall increase in the price of hi-tech stock shares (from the cost price per share a month ago to the current market price per share). Refer to Appendix A for the data and analysis.

1. [1 mark] Without reference to the data distributions but considering the manner in which the data were collected, identify two appropriate tests for determining whether there has been an overall increase in prices.

2. [2 marks] Now look at the boxplots of the data. Which of the two tests above is the most appropriate? Explain briefly with specific references to the appropriate boxplot(s).

3. [4 marks] Ignoring your answer in b), perform the most appropriate parametric test to determine if there has been an overall increase in prices. Use a 10% significance level.

4. [3 marks] Ignoring your answer in b), perform the most appropriate non-parametric test.

Appendix A

Boxplot of MarketPrice, Costprice

Two-Sample T-Test and CI: MarketPrice, Costprice

Two-sample T for MarketPrice vs Costprice

              N Mean StDev SE Mean

MarketPrice 14 26.3   27.9      7.5

Costprice    14 26.1   30.8      8.2

Difference = mu (MarketPrice) - mu (Costprice)

Estimate for difference: 0.130714

90% lower bound for difference: -14.501981

T-Test of difference = 0 (vs >): T-Value = XXXX P-Value = XXXX DF = 25

Paired T-Test and CI: MarketPrice, Costprice

Paired T for MarketPrice - Costprice

              N      Mean     StDev   SE Mean

MarketPrice 14   26.2729   27.9076    7.4586

Costprice    14   26.1421   30.8404    8.2425

Difference   14 0.130714 8.446491 2.257420

90% lower bound for mean difference: -2.917189

T-Test of mean difference = 0 (vs > 0): T-Value = XXXX P-Value = XXXX

Mann-Whitney Test and CI: MarketPrice, Costprice

              N Median

MarketPrice 14   12.35

Costprice    14    9.97

Point estimate for η1 - η2 is 0.08

90.6 Percent CI for η1 - η2 is (-7.46,12.23)

W = 204.0 (test statistic)

Test of η₁ = η₂ vs η₁ > η₂ is significant at 0.4908 (p-value)

Note: η in the output above denotes “true median”.

Wilcoxon Signed Rank Test: Diff

Test of median = 0.000000 versus median > 0.000000

             N

           for   Wilcoxon         Estimated

       N Test Statistic p-value     Median

Diff 14    14       67.0 0.190     0.8805

Which technology is better?

(1)

a technology that involves high initial cost but lower future annual operating costs

(2)

a technology that is cheaper in initial cost but higher future annual operating costs

A. Always (1) Technology

B. Always (2) Technology

C. Depends. Need to evaluation a life-cycle cost

For every penny that the price of gasoline goes up, the U.S. Postal Service (USPS) experiences a monthly fuel cost increase of $8 million. State what assumptions you need to make to answer this question: "How many mail delivery vehicles does the USPS have in the United

States?”

A. Gasoline price before the increase

B. Gas consumption (miles per

gallon) of the average delivery vehicle

C. Total number of miles driven each year by the average delivery vehicle

D. Total number of drivers employed by the USPS

E. Annual repair and maintenance expenses per average delivery

vehicle

Assume that your employer is a manufacturing firm that produces several different electronic consumer products. What are three nonmonetary factors (attributes) that may be important when a significant change is considered in the design of the current bestselling product?

A. Aesthetics

B. R&D expenses incurred for the design

C. Safety

D. Advertising costs

E. Quality in terms of consumer expectations

A home fuel cell is a residential-scaled energy system based on fuel cell technology. Fuel cells are able to fulfill both the electrical and heat demands for a house. The initial cost of a Panasonic home fuel cell is $30,000. A homeowner will finance a system at a finance rate of 10% per year over a three-year period. A down payment of ten percent is required. The operating cost of the fuel cell is expected to be $3,500 in the first year of operation with an increase in cost of five percent per year over the life of the fuel cell. A major maintenance cost of $5,000 is required after four years of use. The life of the fuel cell is estimated to be eight years. After eight years, the fuel cell will have to be removed by a certified technician. The disposal cost will be $2,500. The homeowner has established a MARR of 6% per year.

a. Compute the finance cost per year.

b. Present an amortization chart for this financial arrangement. Include the amount of interest charged for each year, the amount of the payment which pays down the principal and the balance owed for each year of the loan.

c. Compute the amount of money that the homeowner would have to pay if they decided to pay off the loan after making two years of payments.

d. Assume that the homeowner will not pay off the loan after two years. Compute the annual savings in fuel costs that the homeowner would have to realize in order to breakeven on their investment over the eight year life of the fuel cell.

Coastal Biotech is a San Diego company that currently leases data center space in a colocation facility in Kearney Mesa and has ten physical servers for its diagnostic test analysis business. The company is experiencing tremendous growth in business due to COVID-19 testing and needs to quickly expand its capacity 10x. Your CIO would like you to create a cloud architecture drawing that highlights the Infrastructure as a Service (IaaS) services necessary in order to meet the company's growing diagnostic testing needs. You do not need to worry about the actual biological material testing aspects of the company's business, so you should be focusing on the underlying IT infrastructure. The CIO has prepared the following technology requirements to help guide you:

• 2 Terabytes of object storage to start and a plan to scale up and down with business needs
• 2 Virtual Machines for Databases per Region
• Container infrastructure that scales up and down with testing needs
• Container management that is simple enough to be managed with the existing five person IT organization
• Health data needs to be secured
• All credentials need to be centrally managed and secured
• The infrastructure needs to be deployed into two U.S. regions for business continuity purposes

My question is what does the cloud architecture drawing look like that highlights the Infastructure as a Service (IaaS) in order to meet the company's growing diagnostic testing needs? I've had a lot of trouble understanding this concept so your help will be greatly appreciated!

6. A random sample of 15 women’s resting pulse rates from the National Health and Nutrition

Examination Survey (NHANES) showed a mean of 73.5 beats per minute and standard deviation is 17.1

1. Assume that the pulse rates are Normally distributed.

1. (3 points) Find a 99% confidence interval for the population pulse rate of women. Write down what command you used and what numbers you entered.

(d) (2 points) Is it plausible that the population pulse rate for women is 80? Explain.

7. Pass rates for Intermediate Algebra at a community college are 52.6%. In an effort to improve pass rates in the course, faculty of the community college develop a mastery-based learning model where course content is delivered in a lab through a computer program. The instructor serves as a learning mentor for the students. Of the 480 students who enroll in the mastery-based course, 267 pass. Was the college’s effort to improve the pass rate successful? Use = 0.05.

1. (4 points) State the null and alternative hypotheses using both symbols and words (be sure to use the correct symbols).

2. (3 points) Show that the conditions for the CLT are satisfied.

3. (4 points) Perform the appropriate hypothesis test using technology. Write down what command you used and what numbers you entered. Report the values of the test statistic and p-value.

4. (1 point) Do you reject or fail to reject the null hypothesis?

(e) (2 points) State your conclusion in the context of this problem.