Answer the following questions with a narrative (present calculations when required) a. Explain how the Cash Flow Statement is affected by the purchase of new Equipment. b. As part of a land development for a new housing project, a construction company has polluted a natural lake. Under the Provincial Law, the company has to clean up the lake once the land development is completed (expected within 3 years). Current estimates indicate that it will cost $3.0MM to clean up the lake. Explain if a Disclosure is required, and if so, how it will be disclosed / reported in the financial statements. c. A company acquired a land for $100,000. According to the realtor who sold the land, it has a current market value of $125,000. Explain how the acquisition of the land will be recorded in the accounting records and discuss if any Accounting Principle is involved. d. If you are comparing the financial statements of two companies that are exactly the same except that one uses a Straight-Line Depreciation Method and the other uses a Double-Declining Balance Depreciation Method, which explain company would you expect to be reporting a lower Net Income at the earlier stage of a fixed asset's life. e. On Jan. 1, 2020, Aero Corporation issues Bonds with a face value of $200,000 and a coupon rate of 5 percent. The Bonds mature in four years and pay interest semi-annually every June 30 and December 31. What will be the issue price of the Bond if the Market Interest Rate at time of issue is 4 percent? (Please show calculations.) f. A company engaged in the production of beauty products purchased the assets of a similar company that was sold by its owner who was retiring from business. The purchase price was set at $450,000 while the fair value of the Net Assets was estimated at $375,000. Explain how the acquisition will be recorded in the accounting records of the purchaser. g. Eli and Joseph just opened a lawn care business. Eli is saying that revenue must be recognized each time a service has been rendered. On the other hand, Joseph is arguing that revenue must be posted only when cash payment is received. Explain which individual you support and discuss if any Account Principle is involved.

h. Where the price of raw materials is constantly increasing, what Inventory Costing Method would a company likely use if it wants to minimize Income Taxes?