1. Frank Corporation has an asset with a fair market value of $200,000 that it wants to lease. Frank's wants to recover its net investment in the leased asset and earn a 10% return. The asset will revert back to Frank's at the end of a 6-year lease term. If Frank's charges rent annually at the beginning of the year, what should amount should the annual rent be (rounded to whole dollars)? options: 1) $18,8172) $33,333 3) $41,747 4) $53,333 2. On July 1, 2017, Justin Ltd., a dealer in machinery and equipment, leased equipment to Trudeau Inc. The lease is for ten years, and at the end of the lease period, title will pass to Trudeau. Justin requires ten equal annual payments of $62,100 on July 1 of each year, and Trudeau made the first payment on July 1, 2017 Justin had purchased the equipment for $390,000 on January 1, 2017 and established a selling price of $500,000 (which was fair value at July 1, 2017). Assume that, at July 1, 2017, the present value of the rent payments over the lease term discounted at 8% (the appropriate interest rate) was $450,000. The useful life of the equipment is 12 years. For the year ended December 31, 2017, and assuming that Trudeau uses straight-line depreciation, how much depreciation and interest expense should Trudeau record? Options 1) $18,750 and $15,516 2) $18,750 and $24,840 3) $22,500 and $15,516 4) $22,500 and $24,840 3. At December 31, 2017, the following information was provided by the defined benefit pension plan administrator for Leonardo Corp.: Fair value of plan assets. ... $5,000,000 Defined benefit obligation...... .... .... 6,200,000 The corporation uses IFRS. What is the net defined benefit liability/asset account that should be shown on Leonardo's December 31, 2017 statement of financial position? 4. Night Owl Inc. reports a taxable and pre-tax accounting loss of $150,000 for 2017. The corporation's taxable and pre-tax accounting income and tax rates for the last two years were: 2015 $200,000 20% 2016 200,000 25% The 2017 tax rate is 30%. If Indiana elects to use the carryback provisions, the amount that should be reported as income tax receivable for 2017 is Options a.50,000 b.45,000 c. 35,000 d.30,000 5. On January 1, 2017, Lake Corp., a publicly accountable enterprise, purchased 40% of the common shares of Michigan Inc. and accounts for this investment by the equity method. During 2017, Michigan reported earnings of $900,000 and paid dividends of $300,000. Lake assumes that all of Michigan's undistributed earnings will be distributed as dividends in future periods when the enacted tax rate will be 20%. Lake's current income tax rate is 25%. The increase in Lake's deferred tax liability for this temporary difference is options: 1) $120,000. 2) $100,000. 3) $ 60,000. 4) $ 48,000. 1. Frank Corporation has an asset with a fair market value of $200,000 that it wants to lease. Frank's wants to recover its net investment in the leased asset and earn a 10% return. The asset will revert back to Frank's at the end of a 6-year lease term. If Frank's charges rent annually at the beginning of the year, what should amount should the annual rent be (rounded to whole dollars)? options: 1) $18,8172) $33,333 3) $41,747 4) $53,333 2. On July 1, 2017, Justin Ltd., a dealer in machinery and equipment, leased equipment to Trudeau Inc. The lease is for ten years, and at the end of the lease period, title will pass to Trudeau. Justin requires ten equal annual payments of $62,100 on July 1 of each year, and Trudeau made the first payment on July 1, 2017 Justin had purchased the equipment for $390,000 on January 1, 2017 and established a selling price of $500,000 (which was fair value at July 1, 2017). Assume that, at July 1, 2017, the present value of the rent payments over the lease term discounted at 8% (the appropriate interest rate) was $450,000. The useful life of the equipment is 12 years. For the year ended December 31, 2017, and assuming that Trudeau uses straight-line depreciation, how much depreciation and interest expense should Trudeau record? Options 1) $18,750 and $15,516 2) $18,750 and $24,840 3) $22,500 and $15,516 4) $22,500 and $24,840 3. At December 31, 2017, the following information was provided by the defined benefit pension plan administrator for Leonardo Corp.: Fair value of plan assets. ... $5,000,000 Defined benefit obligation...... .... .... 6,200,000 The corporation uses IFRS. What is the net defined benefit liability/asset account that should be shown on Leonardo's December 31, 2017 statement of financial position? 4. Night Owl Inc. reports a taxable and pre-tax accounting loss of $150,000 for 2017. The corporation's taxable and pre-tax accounting income and tax rates for the last two years were: 2015 $200,000 20% 2016 200,000 25% The 2017 tax rate is 30%. If Indiana elects to use the carryback provisions, the amount that should be reported as income tax receivable for 2017 is Options a.50,000 b.45,000 c. 35,000 d.30,000 5. On January 1, 2017, Lake Corp., a publicly accountable enterprise, purchased 40% of the common shares of Michigan Inc. and accounts for this investment by the equity method. During 2017, Michigan reported earnings of $900,000 and paid dividends of $300,000. Lake assumes that all of Michigan's undistributed earnings will be distributed as dividends in future periods when the enacted tax rate will be 20%. Lake's current income tax rate is 25%. The increase in Lake's deferred tax liability for this temporary difference is options: 1) $120,000. 2) $100,000. 3) $ 60,000. 4) $ 48,000