2) Define and explain the accounting treatment of the following items: (8 A) Change in accounting estimate B) Change in accounting principle 3) What are the requirements for a capital lease for a lessee and for the lessor? (12 Points) 4) The following facts apply to the pension plan of Trudy Borke Inc. for the year 20X1: Plan assets, January 1, 2001 Projected benefit obligation January 1, 2001 Settlement rate Annual pension service cost Contributions (funding) Actual return on plan assets Benefits paid to retirees $490,000 490,000 8.5% 40,000 30,000 49,700 33.400 What is the pension expense for 20X1? (6 Points) 5) What are the ways to disclose something in the financial statements? (4 Points) 6) Consider the following information: (8 Points) Asset Cost Salvage Value Life Method $56,000 1,000 10 years Straight Line What is the deprecation in year 3? What would the depreciation in year 4 be if at the beginning of the year we think that the total asset life will be only 8 years instead of 10 years? 7) Answer the following questions relating to accounting for income tax: (12 Points) A) What is a permanent difference? Give an example B) What is a temporary difference? Give an example. C) How is a deferred tax asset and a deferred tax liability established? Give an example of each