Suppose you use a call spread strategy on 4/15/2020, by buying a Facebook call option with the strike price of $180 at $7 and selling a Facebook call option with the strike price of $195 at $2. Both call options mature on 5/15/2020.

What is your total payoff and profit if Facebook share is traded at $170 on 5/15/2020 and what is your total payoff and profit if Facebook share is traded at $185 on 5/15/2020?

Suppose the first population is all Zoom meetings held in March 2020, the second population is all face-to-face meetings held in March 2020, and the parameter of interest is μ1 – μ2 = the difference in the mean number of people attending all Zoom meetings and the mean number of people attending all face-to-face meetings. For both Zoom meetings and face-to-face meetings the distributions are skewed heavily to the right due to some meetings that have many people in attendance.

It is known that the standard deviation of the number of people attending all Zoom meetings in March 2020 is 7.5, and that the standard deviation of the number of people attending all face-to-face meetings in March 2020 is 6.8. A simple random sample of 84 Zoom meetings from March 2020 was selected, and the mean number of people attending this sample of 84 meetings was 21.6. An independent simple random sample of 51 face-to-face meetings in March 2020 was selected, and the mean number of people attending this sample of 51 meetings was 17.4. If appropriate, use this information to calculate and interpret a 99% confidence interval for the difference in the mean number of people attending all Zoom meetings in March 2020 and the mean number of people attending all face-to-face meetings in March 2020.

On 1 November 2019, Pink Ltd issued a prospectus inviting applications for 200 000 ordinary shares to the public at an issue price of $4, payable as follows:
$2 on application (due by closing date of 1 February 2020)
$1 on allotment (due 31 March 2020)
$1 on future call/calls to be determined by the directors
By 1 February 2020, applications had been received for 250 000 ordinary shares of which applicants for 100 000 shares forwarded the full $4 per share and the remainder forwarded only the application money.
At a directors’ meeting on 15 February 2020, it was decided to allot shares in full to applicants who had paid $4 on application, to reject applications for 10 000 shares and to proportionally allocate shares to all remaining applicants. According to the company’s constitution, all surplus money from application can be transferred to Allotment and/or Call accounts. Share issue costs of $3 000 were also paid on 15 February 2020. All outstanding allotment money was received by 31 March 2020.
The call for $1 was made on 1 July 2020 with money due by 1 September 2020. All money was received by the due date.

Required:
Prepare the journal entries to record these transactions of Pink Ltd.

NOELLA Consultants Inc. has had a defined benefit pension plan since January 1, 2014.

The following represents beginning balances as at January 1, 2019:

Market value of Plan Asset $2,008,900; Defined Benefit Obligation $2,340,000; AOCI: Gain of $65,000

Additional Information is as follows:

Current Service cost is $221,000 for 2019 and $215,200 for 2020.

Company Funding/Contribution is $200,400 for 2019 and $212,700 for 2020. Funding is made on December 31 of each year.

Actual return on assets is $115,600 for 2019 and $117,400 for 2020.

There are payments made to retired employees equal to $63,900 in 2019 and for $90,300 in 2020.

Increase in obligation of $123,500 due to Past service cost from plan amendment dated December 31, 2019.

There is an increase in obligation for $64,510 due to changes in Actuarial assumptions at Dec 31, 2020.

The discount/interest rate is 6% for both years.

Required:

1. Prepare a spreadsheet to determine all the pension items for both 2019 and 2020.
2. Prepare the required journal entries for both 2019 and 2020.
3. Prepare a partial balance sheet and a partial income statement for both 2019 and 2020.
4. Prepare the notes to the financial statements for 2019 only.

Note: You can use either the textbook approach or the alternative approach as we discussed in class.

Lina purchased a new car for use in her business during 2019. The auto was the only business asset she purchased during the year and her business was extremely profitable. Calculate her maximum depreciation deductions (including §179 expense unless stated otherwise) for the automobile in 2019 and 2020 (Lina doesn’t want to take bonus depreciation for 2019 or 2020) in the following alternative scenarios (assuming half-year convention for all): (Use MACRS Table 1, Table 2, and Exhibit 10-10.)

The vehicle cost $30,800 and business use is 100 percent (ignore §179 expense).

b. The vehicle cost $74,000, and business use is 100 percent.

c The vehicle cost $74,000, and she used it 80 percent for business.

d. The vehicle cost $74,000, and she used it 80 percent for business. She sold it on March 1 of year 2.

e. The vehicle cost $74,000, and she used it 20 percent for business.

f. The vehicle cost $74,000, and is an SUV that weighs 6,500 pounds. Business use was 100 percent.

1. On January 1, 2020, Pantop Corporation acquired 85% of the outstanding common stock of Sunny Company for $527,000. There was no control premium.

The following information about Sunny Company on January 1, 2020 was available:

Pantop uses the complete equity method to account for its investment in Sunny. During 2020, Sunny had a net income of $80,000. The remaining useful life of the building was five years with no salvage value. Sunny uses straight line depreciation. Sunny’s cost of goods sold (FIFO) was $70,000 in 2020. On December 23, 2020, Sunny declared and paid $48,000 cash dividend to its shareholders. Goodwill was unimpaired as of December 31, 2020.

(i) Prepare journal entries for Pantop to record under the complete equity method of accounting the operating results of Sunny in 2020.

(ii) Prepare the working paper eliminating entries C, E, R, O and N (in journal entry format) for Pantop Corporation and subsidiary for the year ended December 31, 2020.

For the year ended Dec 31, 2020, King Inc. reported pretax accounting income of $800,000.

Select information is listed below:

1) In 2019, 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 2019 through 2023, respectively.

2) 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.

3) In 2020, the company earned $10,000 interest income from municipal bonds. The interest earned on municipal bonds are exempted for tax purposes. King Inc.’s income tax rate is 30%. At January 1, 2020, the deferred tax asset balance was $0 and the deferred tax liability was $12,000.

Required:

What is taxable income for 2020?

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

What is the ending balance of DTL on 12/31/2020?

Prepare journal entry to record income taxes for year 2020.

1. On January 1, 2020, Pantop Corporation acquired 85% of the outstanding common stock of Sunny Company for $527,000. There was no control premium.

The following information about Sunny Company on January 1, 2020 was available:

Pantop uses the complete equity method to account for its investment in Sunny. During 2020, Sunny had a net income of $80,000. The remaining useful life of the building was five years with no salvage value. Sunny uses straight line depreciation. Sunny’s cost of goods sold (FIFO) was $70,000 in 2020. On December 23, 2020, Sunny declared and paid $48,000 cash dividend to its shareholders. Goodwill was unimpaired as of December 31, 2020.

(i)  Prepare journal entries for Pantop to record under the complete equity method of accounting the operating results of Sunny in 2020.

(ii) Prepare the working paper eliminating entries C, E, R, O and N (in journal entry format) for Pantop Corporation and subsidiary for the year ended December 31, 2020.

URGENT!!!
Jamee is a resident tax payer. For the year ended 30 June 2020 he recived:

- Gross salary of $82,000 from which PAYG of 20,100 had been withheld.

- Net interest of $745 afterTFN with holding tax of $715 had been withheld.

- In September 2019, Jamee received $1,100 as his share in winnings from a punters club with his work colleagues.

- In Jan 2020,he received a holiday valued at $3,400 from his employer for achieving the highest sale in the previous year.

- In June 2020, Jamee’s employer announced that he would be giving Jamee a pay rise effective from 1 April 2020. He is therefore to receive backpay of $2000 of which $1000 will be paid on 27 June 2020 and the remaining of $1000 will be paid on 4 july 2020.

-Dividend of $12,000 deposited to his bank account in May 2020 in respect of 70% franked Australian dividend. ( company tax rate 30%).

- Interest on term deposit with a Swedish bank  of $3,600 (10% withholding tax had been deducted).

a. Advise Jamee how each payment would be treated, provide relevant section, case law and other supporting evidence.

b. Calculate Jamee’s assemble income for the current year ended 30 June, 2020.

Jazz Mobile phone is a famous multinational brand producing smart phones. The main aim for
Jazz is to satisfy its users with user friendly, innovative and elegant devices that simplify the
problems of the customers and enable them to enjoy the product. Jazz mobile have different series
with amazing features of large display size, amazing battery time, high definition camera quality
and large internal storages. Jazz have a comprehensive portfolio of hardware, software and services
that enable the digital transformation of networks to address capacity needs, reduce complexity
and leverage network intelligence to create and deliver new services. Operational excellence
remains a source of competitive advantage for Jazz and this becomes the foundation of their
strategy.
According to their vision, Jazz Research is actively conducting research and development (R&D) to
identify new future growth areas and secure advanced technologies for its products to create new value
and improve people’s lives. Jazz has a global network of R&D centers, each with individual
technology and competence specialties. Jazz research promises to continue working hard to become
a global top research institute that creates new values for the future through ceaseless innovation and
intelligence.
Recently Jazz has launched a new phone Book 8. It has the biggest screen and battery, the fastest
processor and the largest storage. It’s a phone designed and built for the power user who won’t
settle for anything less. The Book 8 gives the most advanced features than any other series. After
few days of launching the phone, the customers had a complaint that there is some problem with
the phone. Jazz management ordered the inquiry and identify the issues arising out of the battery
design and manufacturing process. Jazz had to recall about 1.5 million phones after complaints of
manufacturing issues.
Research and development along with the management is concerned about the incident and their
goodwill across the world. R &D is now working to find out the reasons for the failure of their
new Book 8. They wanted to ensure that this problem should not exist for the new model coming
in the future.
a. Sometimes a minor negligence can cost the company in terms of their repute, money, time and
effort. Based on company’s previous experience of Book 8, what steps are required to be followed
by Jazz for comprehensive research for their upcoming model. What suggestions would you
recommend to Jazz R&D to make their research successful?
b. Write the analysis report for the causes of failure of Book 8. What were the practices not
followed before launch of Book 8?