A country’s government has been running a deficit for the past few years. Suppose this country decides to increase its government spending. Compare the impact of the increase in government spending in a closed economy and an open economy.

Describe how the Liskov Substitution Principle can influence the way that you might implement the Open Closed Principle in software. (Describe how it might help but also how it might constrain implementations of the OCP.)

The following information is from Alberta Ltd financial statements for the year ended Dec 31, 2020: - Net income for the year $ 460,000. - 8% Convertible bonds issued at par $1,000,000 ($1000 per bond), each bond convertible into 20 common shares $1,000,000 - 6% non-cumulative preferred shares $100 par value. $1,000,000 - Common shares 120,000 authorized, 60,000 issued and outstanding $ 600,000 - Stock options (call option granted in a prior year) to purchase 30,000 common shares at $10 per common share. - Average market price per common share during 2020 was $12, and the tax rate for 2020 is 35% - Alberta declare and pay $100,000 dividends during 2020 There were no changes during 2020 in the number of common shares, preferred shares, stock options or convertible bonds. Also for simplicity, ignore the requirement to book the convertible bonds’ equity portion separately. Instruction: A) Calculate the basic EPS for 2020 B) Calculate diluted EPS for 2020 (Show your calculation for each transaction/ affect)

The following information is from Alberta Ltd financial statements for the year ended Dec 31, 2020: - Net income for the year $ 460,000. - 8% Convertible bonds issued at par $1,000,000 ($1000 per bond), each bond convertible into 20 common shares $1,000,000 - 6% non-cumulative preferred shares $100 par value. $1,000,000 - Common shares 120,000 authorized, 60,000 issued and outstanding $ 600,000 - Stock options (call option granted in a prior year) to purchase 30,000 common shares at $10 per common share. - Average market price per common share during 2020 was $12, and the tax rate for 2020 is 35% - Alberta declare and pay $100,000 dividends during 2020 There were no changes during 2020 in the number of common shares, preferred shares, stock options or convertible bonds. Also for simplicity, ignore the requirement to book the convertible bonds’ equity portion separately. Instruction: A) Calculate the basic EPS for 2020 B) Calculate diluted EPS for 2020 (Show your calculation for each transaction/ affect)

QUESTION 3

A manager at Stalemate, a chess business retailing chess boards and providing chess lessons, requires help with interpreting some of the accounting transactions that took place during the month of September 2020. The manager has provided you with a list of those transactions below.

Required:

Underneath each transaction in the space provided, write a brief narration describing the economic event that corresponds to that transaction.

On January 1, 2020, Jens Corp. acquired 8%, $ 100,000 (face value) bonds of World Wide Ltd., to yield 9% for $95,517.20. The bonds were dated January 1, 2020, and mature on December 31, 2025, with interest payable each year on January 1. Jen intends to hold the bonds to maturity, and will use the FV–NI model and the effective-interest method of amortization of bond premium or discount. Assume that the fair market value of the bonds was equal to Jens investment’s book value in 2020, but in 2021, the fair market value of the bonds were $101,000 at the end of 2020.

Required:   (Round all answers to the nearest dollar.)

(1) Prepare an amortization schedule ‘proving’ the price that Jen paid for the bonds.

(2) Prepare the following entries in Jen's books:

a)      Acquisition of bonds on January 1, 2020,

b)      Year-end adjusting entry at December 31, 2020, and December 31, 2021.

c)      Receipt of the first interest payment on January 1, 2021.

d)      Any adjusting entry required at the end of 2020 in addition to the any journal entries recorded above.   

Demand and supply. Show in a diagram the effect on the demand curve, the supply

curve, the equilibrium price and quantity of each of the following pairs of events.

a. The market for hand-sanitizers in New York at the beginning of April 2020.

i. The number of Covid-19 cases increases exponentially starting from 1st March 2020;

ii. On March 9, 2020 New York State Governor Andrew Cuomo allowed for state

production of hand-sanitizers.

b. The market for touristic services in Spain in Summer 2020.

i. The European Union imposes travel restrictions to free movement of people (for

leisure) due to the healthcare crisis following the Covid-19 pandemic.

ii. New cleaning protocols require higher standard of sanitization in hotels and public

places to prevent the coronavirus from spreading.

c. The market for real estate in Italy in Spring 2020.

i. Due to the severe restrictions imposed by the lockdown starting from 5th March 2020,

a growing number of families searched for homes with a garden;

ii. The lockdown period produced a GDP fall by 12.4% in second quarter 2020

For your fictitious healthcare service, you will create a balance sheet and income statement based upon the following financial transactions occurring during your start-up year:

6. May 1, 2020 through December 31, 2020: You use $30,000 in supplies to provide healthcare services to your patients each month. You record the use of supplies on the last day of each month.

7. June 1, 2020: You pay your suppliers $80,000 for supplies purchased on credit.

8. July 1, 2020: You receive payments from health insurance companies totaling $250,000.

9. August 1, 2020:

a. You purchase $160,000 of supplies on credit for use in caring for your patients.

b. You receive payments from health insurance companies totaling $320,000

10. September 1, 2020: You receive payments from health insurance companies totaling $225,000.

11. October 1, 2020: You receive payments from health insurance companies totaling $310,000.