ABC Corp. provides its employees with a defined benefit pension plan. The company's actuary has provided you with the following information as of December 31, 2020: PBO $ 1,200,000 Fair Value Plan Assets 1,650,000 Current Service Cost 480,000 Interest Cost 48,000 PSC amortization 120,000 Expected and actual return on assets 165,000 In the past, contributions made to the pension plan have been equal to the pension expense for the corresponding year. The company has not made any contribution in 2020. In the statement of financial position as of December 31, 2020, ABC must report

a. a net pension asset of $ 1,650,000

b. a net pension debt of $ 78,000

c. a net pension debt of $ 450,000

d. a net pension asset of $ 450,000

1 Prepare the journal entries to set up the partnership as at 1 May 2020.

2 prepare a classified Balance Sheet of the partnership as at 1 May 2020.

Michelle and Peter form a partnership on 1 May 2020.

Michelle agrees to bring in $250,000 of cash.

Peter, who has been trading as a sole trader, is to invest certain business assets at agreed market valuations and also transfer his business liabilities.

Details of Peter’s assets and liabilities and their agreed valuations, are as follows:

On January 1, 2020, Winthrop Inc. entered into a lease agreement to lease equipment:

• 5-year lease term
• Annual lease payments are $10,000
• First payment is on January 1, 2020 and the other payments are on 31 December each year
• At the end of the lease the leased asset will revert to the lessor
• The asset’s economic life is estimated at 10 years
• Winthrop could have obtained equivalent financing from its bank at a rate of 5%
• Winthrop’s fiscal year end is December 31
• The equipment has a fair value of $70,000

Required:

1. Calculate the present value of the lease payments.
2. Prepare the amortization table.
3. Classify the lease agreement.
4. Prepare the journal entry(ies) for the lessee for the 2020 fiscal year related to the lease arrangement.

Mariner Corporation, which manufactures sail boats, ordered dry dock equipment from Brown Corporation. This equipment was built for the specialized needs of Mariner, and could not be used by any other company. Instead of purchasing the equipment, Mariner elected to enter into a long term lease agreement with Brown Co. The lease contract was signed on January 1, 2020.   It calls for 12 payments of $15,000, with the first one due on December 31, 2020. The lessor’s implicit interest rate is not known. Mariner’s incremental borrow rate is 8%.

a. Is this lease a finance or operating lease? Explain.

b. Present the journal entry to be made by Mariner when the lease is signed.

c. Show the journal entry that Mariner will make for the December 31, 2020 payment.

Mariner Corporation, which manufactures sail boats, ordered dry dock equipment from Brown Corporation. This equipment was built for the specialized needs of Mariner, and could not be used by any other company. Instead of purchasing the equipment, Mariner elected to enter into a long term lease agreement with Brown Co. The lease contract was signed on January 1, 2020. It calls for 12 payments of $15,000, with the first one due on December 31, 2020. The lessor’s implicit interest rate is not known. Mariner’s incremental borrow rate is 8%. a. Is this lease a finance or operating lease? Explain. b. Present the journal entry to be made by Mariner when the lease is signed. c. Show the journal entry that Mariner will make for the December 31, 2020 payment.

Headland Corp. purchased machinery on January 1, 2016 for $462,000. Straight-line depreciation is used. At the time management estimated that the machinery would be used over 10 years and would have a residual value of $41,000. It is now December 31, 2020 and management has determined that the machine’s life is now a total of 12 years with no residual value. No adjusting journal entries have been recorded yet for the 2020 year-end.

What journal entries are required to record the above events on December 31, 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Shamrock Company reports pretax financial income of $76,100 for 2020. The following items cause taxable income to be different than pretax financial income.

Shamrock’s tax rate is 30% for all years, and the company expects to report taxable income in all future years. There are no deferred taxes at the beginning of 2020.

(a)

Compute taxable income and income taxes payable for 2020.

Suppose an economy has enough labor, capital, and land to produce 1,000 apples per year. Apples are the only product of the economy and the price is $10 per apple. In 2019, money supply is $5, 000 and velocity of money is constant.

a. State the quantity theory of money.

b. Compute nominal GDP and velocity of money in 2019.

In 2020, the central bank of the economy increases the money supply by 10%.

c. Compute nominal GDP and price level in 2020. What is the inflation rate between 2019 and 2020?

d. According to the Fisher effect,

i. how are nominal and real interest rates related to one another?

ii. what will be the impact of the increase in money supply by 10% on nominal and real interest rates respectively?

Suppose you are on the Board of Governors of the Federal Reserve System of the United States (US) economy and are reviewing the following hypothetical economic data in 2019-2020: Real GDP per capita growth rate = 3.1% Unemployment rate = 3.2% Inflation rate = 5.3%

a.Determine what phase of the business cycle the US economy is likely to be experiencing in 2019-2020. Provide specific reasons for your answer

b. Use a well-labelled AD/AS diagram to show the position of this economy in 2019-2020. Explain whether the US government should use expansionary or contractionary monetary policy to move the economy back to the long run, fullemployment GDP equilibrium. Draw the AD curve shift(s) associated with this policy change on your diagram.