1) Papaya Inc. has 100,000 common shares outstanding and has a policy of paying a $1.30 annual dividend for each of these shares. Papaya has an income tax rate of 35%, and its retained earnings statement for 2020 reported a closing balance of $1,452,000. Assuming an opening retained earnings balance of zero, dividend payments according to its usual policy, and no other adjustments, Papaya's 2020 net income was

$1,582,000.

$1,452,000.

$2,364,846.

$1,536,500.

2) For Pear Limited, events and transactions during 2018-2020 included the following. The tax rate for all items is 30%. 1. Depreciation for 2019 was found to be understated by $30,000. 2. A 2020 strike by the employees of a supplier resulted in a loss of $20,000. 3. The inventory at December 31, 2018 was overstated by $40,000. 4. A 2020 flood destroyed a building that had a book value of $400,000. Floods are very uncommon in that area. The effect of these events and transactions on the balance of retained earnings at January 1, 2020 would be

$21,000.

$294,000.

$14,000.

$343,000.

3)

eg Inc. incurred the following infrequent losses during 2020: A $135,000 write down of equipment leased to others (net of tax) A $60,000 adjustment of accruals on long-term contracts (net of tax) A $90,000 write off of obsolete inventory (net of tax) Of those losses, what amount should be included in Megs 2020 income from continuing operations?

$285,000

$150,000

$195,000

$225,000

4)

On January 1, 2020, Reggae Ltd. sold land that cost $180,000 for $240,000, receiving a note bearing interest at 10 percent. The note will be paid in three annual instalments of $96,510 starting December 31, 2020. Assuming that collection of the note is very uncertain, how much revenue from this sale should Reggae recognize in 2020?

$96,510

$0

$18,000

$24,000