The national average for non-mortgage debt is $31,531 in Canada with a standard deviation of $5,215. The average non-mortgage debt in a randomly selected sample of 60 Kingston residents is $29,132. Do Kingstonians have lower non-mortgage debt levels than the rest of the country?

Just like the balance sheet distinguishes current assets from non-current ones, it also reports current and non-current liabilities?

What is the difference between these two categories?

Why do we distinguish current items from non-current ones?

Question 5 : In accordance with HKAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, discuss the procedures in selecting, applying and changing the accounting policies for the listed companies in Hong Kong.

Question 6: In accordance with HKAS 10 Events after the Reporting Period, what is the core principle? What are adjusting events and non-adjusting events? Discuss with examples.

Question 7 : In accordance with HKAS 23 Borrowing Costs, what is the core principle? What are the accounting treatments of borrowing costs eligible for capitalisation? What are the criteria to start measuring for capitalisation?

Question 8 : In accordance with HKAS 38 Intangible Assets, discuss the criteria for development costs to qualify for recognition as intangible assets.

Question 9 : Most preparers and users of financial statements recognize that there is a need for a formal conceptual framework in financial reporting. Therefore, there is a formal conceptual framework for accounting, accounting practice and accounting standards are based on this framework can benefit different stakeholders.

REQUIRED:

Discuss the purposes of the IASB/HKICPA Conceptual Framework for Financial Reporting 2018.

The Child Tax Credit prior to 2018 provided a subsidy to families with children and was part of the US Federal Income Tax code. For married couples filing jointly, the credit was $1000 for each eligible child and was phased out at the rate of 5% for income above $110,000. For a family with four children and no other non-wage income besides the credit, answer the following questions. Assume no other taxes/subsidies.

A) Draw the annual budget constraint with and without the tax credit program, assuming that full income is $300,000/year.

B) Calculate the breakeven level of earnings under the program.

C) Using indifference curve analysis, describe how the program would likely affect a person's labor supply if the person's earnings in absence of the program were less than $110,000. Explain.

D)  Using indifference curve analysis, describe how the program would likely affect a person's labor supply if the person's earnings in absence of the program were less than $150,000.

Jayhawk Company leased a machine from Houston Leasing. The machine had a 5 year life. The lease was for three years and required three payments of $200,000 each made at the beginning of the year starting with January 1, 2017. The lease was non-cancellable, and title did not pass at the end of the lease. There was no bargain purchase right either. However, the present value of the minimum lease payments was greater than 90% of the fair value on January 1, 2017. The cost of the leased equipment to Houston was $450,000. Houston’s earning’s rate is 8%, and there is a guaranteed residual value of $20,000 at the end of year 3. The actual value at the end of year 3 was $15,000. Houston considers this lease a sale type lease.

On the books of Houston,

Prepare an amortization schedule of the lease receivable.

Record the inception of the lease on January 1, 2017 and the receipt of the first payment.

Record the last receipt from the lease and the return of the equipment.

Assume the lease was cancellable. Record the receipt of the second payment on January 1, 2018.

Losses covered by an insurance policy are uniform on [0, 2000]. An insurance company reimburses losses with a deductible of 700. Calculate the difference between the first quartile and the third quartile on the insurance company’s reimbursement.

1. Draw a cash flow diagram on EXCEL using the data below