In 4.3, first, the only way we can interpret the problem so that it makes sense is that the numbers listed are in thousands, so 50,000 means 50 million. Please let us know if this is not the case. For part b, we are required to reconcile the firm's tax payment. However, even after adjustments, to me it seems like the company has a negative tax liability, meaning it won't have a tax payment and would be adding a deferred tax asset. But I am not so sure the book intends us to get that deep into the accounting. So would demonstration that the company owes 0 taxes a sufficient answer? Alternatively, for part a, the problem mentions copyrights owned by the company are conservatively appraised at $100 million, while listed on the balance sheet at $10 million. Because the problem asks for adjusted financial statements, to me this means we increase assets for the full value, and add a corresponding increase to owners equity. If, however, this increase is not supposed to affect owners equity and instead be recogniz

You are correct, the figures are stated in thousands. Showing zero tax liability is sufficient. In making adjusted financial statements, we are not asked to make current value accounting statements, so knowing that the copyrights are worth $100,000,000 instead of $10M is nice, but this should not be included on the adjusted statements.