1.On September 1, 2021, Custom Shirts Inc. entered into a lease agreement appropriately classified as an operating lease. The lease term is three years. The annual payments by Custom Shirts are (a) $20,000 for year 1, (b) $24,000 for year 2, and (c) $28,000 for year 3. How much total lease expense will Custom Shirts recognize for 2021? (Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.)

Multiple Choice

• $6,667.

• $20,000.

• $8,000.

• $24,000.

2. N Corp. entered into a nine-year finance lease on a warehouse on December 31, 2021. Lease payments of $34,000, which includes maintenance services of $1,700, are due annually, beginning on December 31, 2022, and every December 31 thereafter. N Corp. does not know the interest rate implicit in the lease; N's incremental borrowing rate is 10%. The rounded present value of an ordinary annuity for nine years at 10% is 5.7590. What amount should N report as recorded lease liability at December 31, 2021?

Multiple Choice

• $290,700.

• $186,016.

• $195,806.

• $204,000.

3.information for Hobson Corp. for the current year ($ in millions):

Income from continuing operations before tax	$	410
Loss on discontinued operation (pretax)		100
Temporary differences (all related to operating income):
Accrued warranty expense in excess of expense included in operating income		70
Depreciation deducted on tax return in excess of depreciation expense		115
Permanent differences (all related to operating income):
Nondeductible portion of entertainment expense		15

The applicable enacted tax rate for all periods is 25%. What is Hobson's income tax payable for the current year? (Round your answer to 2 decimal places.)

Multiple Choice

• $66.50 million.

• $63.50 million.

• $68.60 million.

• $70.00 million.