On June 1, 2020, the Crocus Company began construction of a new manufacturing plant. The plant was completed on October 31, 2021. Expenditures on the project were as follows ($ in millions):

On July 1, 2020, Crocus obtained a $70 million construction loan with a 6% interest rate. The loan was outstanding through the end of October, 2021. The company's only other interest-bearing debt was a long-term note for $100 million with an interest rate of 8%. This note was outstanding during all of 2020 and 2021. The company's fiscal year-end is December 31.

What is the amount of interest that Crocus should capitalize in 2021, using the specific interest method? (Enter your answers to nearest whole dollar amount.)

$7,283,000.

$7,117,000

$8,740,000.

$7,248,000.

(b) The information below relates to a leasing arrangement between Simmonds Leasing Company and Telsan Company, a lessee.

Inception date        January 1, 2020

Lease term         6 years

Annual lease payment due at the beginning of

each year, beginning with January 1, 2020   $150,000

Fair value of asset at January 1, 2020     $760,000

Economic life of leased equipment     7 years

Residual value of equipment at end of lease term,

guaranteed by the lessee       $65,500

Lessor’s implicit rate      10%

Lessee’s incremental borrowing rate    12%

January 1, 2020

The asset will revert to the lessor at the end of the lease term. The lessee has guaranteed the lessor a residual value of $65,500. The lessee uses the straight-line depreciation method for all equipment.

Instructions

iii) Record the first year’s depreciation on Telsan Company’s books.

iv)Record interest expense and lease liability for Telsan Company for the year ending December 31, 2020.

On December 31, 2019, Cheyenne Inc. borrowed $3,960,000 at 13% payable annually to finance the construction of a new building. In 2020, the company made the following expenditures related to this building: March 1, $475,200; June 1, $792,000; July 1, $1,980,000; December 1, $1,980,000. The building was completed in February 2021. Additional information is provided as follows.

Determine the amount of interest to be capitalized in 2020 in relation to the construction of the building

Prepare the journal entry to record the capitalization of interest and the recognition of interest expense, if any, at December 31, 2020.

For its first year if operations, Altitude Inc. reports pretax GAAP income of $100,000 in 2020. Assume pretax income in 2021 and 2022 of $125,000 and $90,000 respectively. The enacted income tax rate in all years is 25%. The following additional information is available for the first three years of operation (with the exception of the one item in the 4th year).

• Prepaid rent in the amount of $20,000 was recorded on December 21, 2020 for 2021 rent.
• A warranty accrual of 30,000 was recorded on December 31, 2020. The warranty was paid evenly over the years 2021-2023.
• The company recorded interest revenue of $500 each of the three years on municipal bonds.

1. Compute the income tax payable each year for 202, 2021, 2022
2. Determined the balance of any deferred tax assets or deferred tax liabilities at the end of each year (2020, 2021, 2022)
3. Record the journal entry related to taxes in 2020, 2021, 20222

Describe using words and graphs the how the impact of fiscal policy on output is different in a closed economy IS-LM model and an open economy IS-LM model. In addition, explain carefully how the open economy macro model depends on whether exchange rates are fixed or flexible.

Describe using words and graphs the how the impact of fiscal policy on output is different in a closed economy IS-LM model and an open economy IS-LM model. In addition, explain carefully how the open economy macro model depends on whether exchange rates are fixed or flexible.

Chemical modifications of histone tails are often made in chromatin to change the amount of chromatin compaction. Name three chemical modifications that have been observed by scientists to be on histone tails in chromatin. the modifications that you listed and discuss whether that modification is associated with closed or open chromatin.

A mixture of 0.750 atm ClF3 , 0.554 atm F2 , and 0.394 atm ClF is heated in a closed vessel to 700 K .

ClF3(g)↽−−⇀ClF(g)+F2(g)Kp=0.140 at 700 K

Calculate the equilibrium pressure of each gas at 700 K .

Question 4   (30 minutes)

Easy Company bought a piece of equipment four years ago. At December 31, 2020, the company revalued the equipment to its fair value. The following information relates to the equipment

Original cost: $1,200; Residual value: $ 200; Estimated useful life from purchase date: 10 years; Years used to December 31, 2020: 4 years; Fair value at December 31, 2020: $966; Depreciation method is straight-line.

Required:

1. Determine the depreciation expense for 2020.
2. Record the journal entry adjustment for the revaluation, using the ‘asset adjustment’method.
3. Determine the depreciation expense for 2021.
4. Assume that the fair value at the end of 2022 is $468. Record the journal entry for depreciation first for 2022, and then the entry related to this new fair value for 2022.

Question 5   (25 minutes)

Buzz Bee Yard Company’ Apiary began operations on January 1, 2020, with the purchase of 100 bee hives for $500 total. Buzz follows IFRS and its standard on agricultural products. It has completed the first year of operations and has the following information for its bee hives at December 31, 2020:

1. Bee Hives – purchase of hives as per above                                                                 $   500
2. Honey harvested during 2020 (at net realizable value)                                         1,900                  
3. Honey sold during 2020 (at net realizable value)                                                    1,600
4. Hive maintenance costs directly traceable to hive activity in year                      $60        
5. Company general administration costs                                                                           $40
6. Fair value on Dec. 31, 2020 of hives                                                                              $1,300    

Required:

1. Prepare all the journal entries for Buzz’s bee hives activities for 2020, as per the information in (a) to (f).

Question 6   (25 minutes)

The following events occurred in 2020:

1. June 30, 2020    A building that Big Company had purchased on January 1, 2016, for $ 10,000 was exchanged for another building owned by Other Company. Big Company exchanged its building and $1,000 cash for Other Company’s building. Big’s building had a fair value of $ 9,500 at the time of the exchange. Straight-line depreciation on the building with a 40-year useful life and no R.V. has been properly charged from Jan. 1, 2016 through Dec. 31, 2019. Both parcels of land on which the warehouses were located were equal in value, and had a fair value equal to book value. Big Company’s building contained a manufacturing operation. Other Company’s building was an office building.

2. Dec. 30, 2020      Machinery with a cost of $ 120 and accumulated depreciation through December 31, 2019, of $ 90 was exchanged, along with $ 15 cash, for a parcel of land with a fair market value of $ 44. Straight-line depreciation had been used for the machine. The machine had a 12-year useful life, and was 9 years-old as at Dec. 31, 2019.

3. Big Company replaced a roof on a building that it purchased in 2008. (12 years old as at Dec. 31, 2020.) The building cost $400,000 in 2008, and had an estimated life of 40 years, with no residual value. The new roof costs $25,020 to install. Big Company estimated that prices for goods and services have increased by 80% since 2008 . The roof component was not separately identified in the company accounts, but, of course, was included in the building asset at that time.

Required: Prepare ALL journal entries for 2020 related to the three situations above. Each situation may require more than one entry.

1.Given the following for the Vitale Company; the company began operations on 1/1/1.
Preferred Stock, 4%, cumulative Common Stock $20,000 Cash Dividends paid

Year 1 $1100

Year 2 $700
Year 3 $1500
Year 1 Dividends received by the Preferred shareholders is: common stock is:
Year 2 Dividends received by the Preferred shareholders is: common stock is:
Year 3 Dividends received by the Preferred shareholders is: common stock is:

2. Specialty Packaging Corporation began business on March 1, 2013 by issuing 20,000 shares of common stock. The stock has a $1 par value but sold for $8 per share. At December 31, 2013, the common stock had a market value of $6. On its December 31, 2013 balance sheet, Specialty Packaging would report

3.
treasury stock is closed or no closed？