On January 1, 2020, The Fio Corporation purchased a machine for $600,000. The corporation estimated a 5-year useful life (or 300,000 units of useful life) and $60,000 residual/salvage value.

45000 Units were produced in 2020.

6 points:

Complete the following table using the indicated depreciation method and year for each row of the table.

4 points:

What would the journal entry be if the straight-line method was used and the machine was sold on 12/31/2020 for $500,000?

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.)

A 58-year-old man was admitted for abdominal surgery. He was extremely agitated and had several questions for the health care team. He often asked the same question in a different way. Following surgery, he was lethargic but seemed to be resting comfortably. Shortly after transfer back to the floor, he awoke in pain and was quite agitated. After receiving medication for his pain, he was able to rest. On the third day postoperatively, his wife was obviously upset when she came to visit, although she was trying to hide her feelings. Eventually, she admitted that a notice had arrived in the mail notifying him that his employer had declared bankruptcy and closed down. The patient became very distressed. Later, after his wife left, he became despondent, complaining of a headache and wondering how long he would have to remain in hospital. He told the nurse that he was worried about his benefit plan and whether his hospital costs would be covered.

1. Based on the patient history and the signs and symptoms, discuss the stages of stress response that the patient is experiencing and might experience in the future. (See Three Stages in Stress Response—GAV.)

2. Discuss other problems that this patient might experience as a result of stress and the underlying physiological cause of these problems. (See Stages in Stress Response, Significant Effects of the Stress Response.)

Hands Insurance Company issued a $90 million, one-year note at 8 percent add-on annual interest (paying one coupon at the end of the year) or with an 8 percent yield. The proceeds were used to fund a $100 million, two-year commercial loan with a 10 percent coupon rate and a 10 percent yield. Immediately after these transactions were simultaneously closed, all market interest rates increased 1.5 percent (150 basis points). a. What is the true market value of the loan investment and the liability after the change in interest rates? b. What impact did these changes in market value have on the market value of the FI’s equity?What was the duration of the loan investment and the liability at the time of issuance? d. Use these duration values to calculate the expected change in the value of the loan and the liability for the predicted increase of 1.5 percent in interest rates. e. What is the duration gap of Hands Insurance Company after the issuance of the asset and note? f. What is the change in equity value forecasted by this duration gap for the predicted increase in interest rates of 1.5 percent? g. If the interest rate prediction had been available during the time period in which the loan and the liability were being negotiated, what suggestions would you have offered to reduce the possible effect on the equity of the company? What are the difficulties in implementing your ideas?

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.

Hi there, I have put up the full sheet but it is question two that I need answered the most. Thank you for your time.

Question 1.

Drunk driving is one of the main causes of car accidents. Interviews with drunk drivers who were involved in accidents and survived revealed that one of the main problems is that drivers do not realise that they are impaired, thinking “I only had 1-2 drinks … I am OK to drive.” A sample of 5 drivers was chosen, and their reaction times (seconds) in an obstacle course were measured before and after drinking two beers. The purpose of this study was to check whether drivers are impaired after drinking two beers. Below is the data gathered from this study:

Driver 1 2 3 4 5

Before 6.15 2.86 4.55 3.94 4.19

After 6.85 4.78 5.57 4.01 5.72

1. The two measurements are dependent. Explain why. [1 mark]

2. Provide an estimate of the mean difference in reaction times between the two measurements. [4 marks]

3. Calculate and interpret a 95% confidence interval for the mean difference in reaction times between the two measurements. [15 marks]

4. Use a 5% level of significance and the following points to test the claim that reaction times before drinking two bears is lower than reaction times after drinking two bears.

(a) State the null and alternative hypotheses in symbolic form and in context.

(b) Calculate the test statistic.

(c) Identify the rejection region(s).

(d) Clearly state your conclusions (in context). [4 marks each]

5. What would the conclusion be if using a 1% level of significance? Justify your answer. [4 marks]

Question 2

This is part 2, this is the part that I need answered. Thank you for your time.

It was believed from the experiment on the obstacle course, in Part I, that there is a relationship between a subject’s reaction time before drinking two beers and the subject’s age:

Driver 1 2 3 4 5

Age (years) 20 30 25 27 26

1. What type of study is being outlined here? Justify your answer. [2 marks]

2. Plot a graph representing the relationship between reaction times before drinking two beers and age. [5 marks]

3. From the graph in Q2, suggest a relationship that could exist between the two measurements. [2 marks]

4. Use a 1% level of significance and the following points to test the claim that there is a relationship between the reaction times before drinking two beers and age.

(a) State the null and alternative hypotheses in context. [3 marks]

(b) Calculate the test statistic. [8 marks]

(c) Identify the rejection region(s). [4 marks]

(d) Clearly state your conclusions (in context). [4 marks]

5. What percentage of variation in reaction times before drinking two beers is unexplained by the relationship between reaction times before drinking two beers and age? [2 marks]

6. Derive a model/equation that could be used to predict reaction times before drinking two beers for a person, if the age of the person is known. [8 marks]

7. Using the model derived in Q6, what would the predicted reaction time, in the obstacle course, before drinking two beers of a 22-year-old be? [2 marks

1. The company purchased a one-year insurance policy on November 1, 2010 at a cost of $2,400.  No adjusting entries for the year had yet been made.

Debit : insurance expense $400

credit : prepaid insurance $400

Why is it become $400?