1. Lewis Inc. began operations in January 2013. For certain of its property sales, Lewis recognizes income in the period of sale for financial reporting purposes. However, for income tax purposes, Lewis recognizes income when it collects cash from the buyer's installment payments. In 2013, Lewis had $600 million in sales of this type. Scheduled collections for these sales are as follows: Assume that Lewis has a 40% income tax rate and that there were no other differences in income for financial statement and tax purposes. Ignoring operating expenses, what deferred tax liability would Lewis report in its year-end 2013 balance sheet? (Questions 2 5). Each of the four independent situations below describes a lease requiring annual lease payments of $30,000. Required: For each situation, determine the appropriate lease classification by the lessee and indicate why. (Ques 2) Situation 1 (Ques 3) Situation 2 (Ques 4) Situation 3 (Ques 5) Situation 4 6. The following information is available for Whiteside Company for 2013: Net Income $120,000 Realized gain on sale of available-for-sale securities 10,000 Unrealized holding gain arising during the period on available-for-sale securities 24,000 Reclassification adjustment for gains included in net income 8,000 Instructions 6a. Determine other comprehensive income for 2013. 6b. Compute comprehensive income for 2013 7. The following information for Rapley Enterprises is given below: December 31, 2013 Assets and obligations Plan assets (at fair value) $100,000 Accumulated benefit obligation 185,000 Projected benefit obligation 200,000 Other Items Pension asset / liability, January 1, 2013 5,000 Contributions 60,000 Accumulated other comprehensive loss 83,950 There were no actuarial gains or losses at January 1, 2013. The average remaining service life of employees is 10 years. 7a. What is the pension expense that Rapley Enterprises should report for 2013? 7b. What is the amount that Rapley Enterprises should report as its pension liability on its balance sheet as of December 31, 2013? 7c. The amortization of Other Comprehensive Loss for 2014 is: 8. The following information is for Moyano, Inc. for the year ended December 31, 2013. Moyano had a cash and cash equivalents balance of $5,200 on January 1, 2013, and $2,320 on December 31, 2013. Required: Prepare a statement of cash flows in good form for the year using the direct method for operating activities. 9 and 10. Lee Co. is a calendar-year firm with 120 million common shares outstanding throughout 2013. As part of its executive compensation plan, at January 1, 2012, the company had issued 12 million executive stock options permitting executives to buy 12 million shares of stock for $10 each within the next eight years, but not prior to January 1, 2015. The fair value of the options was estimated on the grant date to be $3 per option. The stock options qualify for tax purposes as an incentive plan. The company's net income was $480 million in 2013. Its income tax rate is 40%. The average market price of the stock during 2013 was $12 per share. Required: 9. Determine basic earnings per share (rounded to two decimal places) for Lee in 2013. 10. Determine diluted earnings per share (rounded to two decimal places) for Lee in 2013