Show the working clearly with accounting tables where applicable

Ilitiuestion 2: A. In the nancial statements of ABLF, the company reports more than $10 million in marketable securities and zero unrealized gains or losses from marketable securities as at February 1, 2003. Given this information, what is your best estimate of what type of securities AF holds {debt or equity} and how has the company classied the securities [heldtomaturity, trading, or availableforsale]? [2 points] 0. Assume that company AAA purchased 1000 sha res of 222 in 1553 for $50 per share. The company classied these shares as trading securities. Since 1558, 222 had paid no dividends. The price of 222 shares at the end of each year from 1558 to 1552 are as follows: Year 1553 1555 2000 2001 2002 Price $52 $60 545 55:: 5m In June 2003, MA sold its entire investment in 2'22 for proceeds {before-tax} of $30,000. 1. Provide the balance sheet equation entries required at the end of 2001 and 2002, and for the sale in 2003. Include the effect of income taxes at a rate of 35%. For simplicity, you may assume that taxes due on any realized gains are paid immediately with cash. {Note: although not required, it may be helpful to oompute the balance of your accounts at the beginning of 2001.} [12 points] 2. Identify the effect of the sale of 222 shares on MA's indirect statement of cash ows [SCH for 2003. Please note {El the nature of the cash ow, [ii] the amount, and [iii] in which of the three section of the SCF the item appears. One part of this has been completed for you. [6 points] Dpe rating activities: Net income [reflects gain aftertax] +,500 Question 3: On December 31, 2002, Company CCC entered into its only lease for a "Googleplexer." On the company's December 31, 2002 financial statements, you find the following information: Note 1: Accounting Policies The company depreciates property, plant, and equipment using the straight-line method. Note 5: Leases Future minimum lease payments Capital Leases 2003 $300,000 2004 300,000 2005 300,000 2006 300,000 2007 300,000 2008 and later 0 Total minimum lease payments $1,500,000 Portion representing interest 333,105 Net 1,166,895 Current portion 194,979 Long-term lease obligation $971,916 A. How much was recorded in property, plant, and equipment for this lease? [2 points] B. How much is the effective interest rate on this lease? [3 points]Question 4 On January 1, 2005, Golf Tee Inc. will acquire a vehicle from a car dealership for $50,000. The dealership offers to lease the vehicle to Golf Tee Inc. for five years with payments of $12,462 due on December 31 of each year. The expected resale value of the car after five years is $0, and the borrowing rate for Golf Tee Inc. is 12%. A. By simply examining the terms, do you believe this lease qualifies as a capital lease or an operating lease? Explain.Question 1 Abercrombie & Fitch (A&F) is a large and growing retail chain of 597 stores in the U.S. The following information has been extracted from the company's February 1, 2003 annual report. (thousands of dollars) 2003 2002 Gross property, plant, and equipment $585,642 $501,323 Accumulated depreciation 192,701 136,211 Net property, plant, and equipment 392,941 365,112 Deferred tax liabilities related to PP&E 25,954 7,417 Statutory tax rate 38.5% Indirect statement of cash flows Operating activities: addback for depreciation 56,925 Operating activities: add losses (less gains) from disposal 0 Investing activities: purchases of PP&E -92,976 A. Calculate the cash received from the disposal property, plant, and equipment (PP&E) for the fiscal year ended February 1, 2003. (It may be helpful to use balance sheet equation entries to reverse engineer the disposal transaction.) [12 points] B. Estimate the cumulative book-tax timing difference related to PP&E as at February 1, 2003. [3 points] C. Estimate the amount of depreciation for tax purposes claimed by A&F for the fiscal year ended February 1, 2003. [5 points]