Reference no: EM133079882

Questions -

Q1. On August 1, 2021, Dani Corporation leased a machine to Sam Corporation for a 6-year period requiring payments of $100,000 at the end of each year. The machine cost $480,000, with an economic life of 8 years and no residual value. Dani's implicit interest rate is 10% and present value factors are as follows: Present value of annuity due of P1 at 10% for 6 periods - 4.791; Present value of an annuity of P1 at 10% for 8 periods - 5.868. Dani recorded the lease as a direct financing lease. What amount is the gross lease receivable account balance at the inception of the lease?

Q2. On January 1, 2021, Cola Corporation provided the following data in connection with the defined benefit plan: Fair value of plan assets - $6,700,000; Projected benefit obligation - $7,600,000. The accountant revealed the following information for the current year: Current service cost - $1,750,000; Past service cost - $300,000; Discount rate - 10%; Expected return on plan assets - 12%; Actual return on plan assets - $500,000; Contributions to the plan - $2,000,000; Benefit paid to retirees - $1,250,000. How much is the employee benefit expense on December 31, 2021?

Q3. On January 1, 2021, Dom Company purchased investment securities for $1,200,000. The securities are classified as trading. By December 31, 2021, the securities had a fair value of $1,680,000 but had not yet been sold. The company recognized a $320,000 restructuring charge during the year. The restructuring charge is composed of an impairment write-down on a manufacturing facility. Tax rules do not allow a deduction for the write-down unless the facility is actually sold. The facility was not sold by the end of the year. Excluding the trading securities and the restructuring the charge, income before taxes for the year was $4,000,000. The income tax rate for the current year and future years is 30%. How much is Dom's current tax expense?

Q4. On January 1, 2020, Barn Corporation granted the president, 20,000 share appreciation rights for past services. Those rights are exercisable immediately and expire on January 1, 2023. On exercise, the grantee is entitled to receive cash for the excess of the market price on the exercise date over the market price on the grant date. The grantee did not exercise any of the rights in 2020. The market price of share was $30 on January 1, 2020 and $45 on December 31, 2020. How much should be recognized as compensation expense for 2020?