1. Macintyre Inc. sells household furniture on an instalment basis. Customers make payments in equal monthly instalments over a two-year period, with no down payment required. Macintyre's gross profit on instalment sales is 40% of the selling price. For book purposes, sales revenue is recognized at the time the sale is made. For income tax purposes, however, the instalment method is used. There are no other accounting and income tax accounting differences, and Macintyre's income tax rate is 30%. If Macintyre's December 31, 2017, statement of financial position includes a deferred tax liability of $90,000 arising from the difference between accounting and tax treatment of the instalment sales, it should also include instalment accounts receivable of Options a. $750000 b.$350000 c. $225,000 d. $90,000 2. 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 a. $120,000 b. 100,000 c. 60,000 d. 48,000 3. 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 a. S18,750 and $15,516 b.$18,750 and $24,840 c. $22,500 and $15,516 d. $22,500 and $24,840