Signin/Signup
Signin/Signup
Info
Warning
Danger

Accounting Answers, Flashcards, Essays and Textbook Solutions

The hard task of handling college homework is one of the most common challenges in the path of student success. No student ever says, "Hey I love homework! Give me more!" (However nerdy they are) Yet, it is an unavoidable part of your college experience.

Ask an Expert

Our Experts can answer your tough homework and study questions.

Answers in as fast as 15 minutes
Post a Question
Ex. 15-142—Treasury shares. Sasquatch Corporation's last year-end balance sheet reported the following: Common shares, no par, outstanding 5,000 shares$115,000 Retained earnings200,000 The following transactions occurred this year: (a) Purchased 70 common shares at $30 per share, to be held as treasury shares. (b) Sold 60 treasury shares at $32 per share. (c) Retired the remaining treasury shares. Instructions Prepare.
4 Views
View Answer
Use the following information for questions 54 through 56. Harriet Ltd issued $6,000,000 (par value), 9%, ten-year convertible bonds on July 1, 2012 at 96.1 plus accrued interest. The bonds were dated April 1, 2012 with interest payable on April 1 and October 1. If the bonds had not been convertible,.
4 Views
View Answer
Pr. 15-147—Issuance of shares for cash, non-cash consideration, and by subscription. Instructions Chan Corp has an unlimited number of no-par common shares authorized. Prepare the journal entries for the following transactions. 1. Sold 600,000 shares at $10; collected cash in full and issued the shares. Share issue costs amounted to $61,400. Treat this.
4 Views
View Answer
Ex. 16-85—Employee share ownership plans. Lydia Inc. set up an ESOP under which employees may purchase shares of the company for $20 per share. The option premium is $.50 per share and Lydia set aside 20,000 shares. On January 1, 2012, 12,000 options are purchased by employees. On December 1, 2012,.
5 Views
View Answer
31. Hedging is the use of a. derivatives or other instruments to increase returns. b. derivatives or other instruments to offset risks. c. debt to offset risks. d. forward contracts. 32. A fair value hedge protects the company against a. errors in valuation of derivative instruments. b. a future transaction that has not yet been recognized. c. an.
4 Views
View Answer
Pr. 15-153—Treasury share transactions. Wye Inc. currently has 5,000 no par common shares outstanding, with a book value of $175,000. Instructions Record the share transactions given below. Transactions: (a) Bought 300 common shares as treasury shares at $31. (b) Sold 80 treasury shares at $30. (c) Sold 40 treasury shares at $34. (d) Retired the rest of.
4 Views
View Answer
Ex. 15-138—Dividends on preferred shares. At December 31, 2012, Rock Inc. has outstanding the following shares: 5,000, $3.20, no par preferred shares with a carrying value of $200,000, and 40,000 no par common shares with a carrying value of $400,000. No dividends have been paid since December 31, 2009. The corporation now desires.
6 Views
View Answer
Ex. 15-140—Calculation of selected financial ratios. Instructions Calculate the following (assume no changes in share account balances during 2012): (a) Total amount of shareholders’ equity on the December 31, 2012 balance sheet. (b) Earnings per share. (c) Price-earnings ratio of common shares. (d) Payout ratio of common shares. (e) Book value per common share.       .
4 Views
View Answer
Pr. 16-89—Employee stock options. On November 1, 2010, Logan Corp. adopted a stock option plan allowing some of their executives to purchase a total of 30,000 common shares. The options were granted on January 2, 2011, and were exercisable four years after the grant date (Jan 2, 2015), as long as.
4 Views
View Answer
Ex. 16-84—Stock options. Prepare the necessary entries from January 1, 2011 to February 1, 2013 for the following events. If no entry is needed, write "No entry necessary." 1. On January 1, 2011, the shareholders of Mynah Byrd Inc. adopted a stock option plan for its top executives, where each could receive.
4 Views
View Answer
MULTIPLE CHOICE—CPA Adapted Use the following information for questions 73 and 74. On January 2, 2011, Corn Corp. issued 10-year convertible bonds at 105. During 2012, these bonds were converted into common shares having a total value equal to the total face amount of the bonds. At conversion, the market price of.
4 Views
View Answer
Ex. 16-81—Convertible bonds. SoftTop Ltd. sold convertible bonds at a premium. Interest is paid on May 31 and November 30. On May 31, after the required interest was paid, all the bonds were converted into 3,000 no par value common shares, which were currently trading at $40 per share. Instructions How should SoftTop.
4 Views
View Answer
6. An arbitrageur depends on a. information asymmetry between markets. b. hedging opportunities between markets. c. differing credit risks. d. differing liquidity risks. 7. Derivatives should be valued at a. historical cost. b. fair value or historical cost. c. fair value. d. discounted cost. 8. Gains on derivatives should a. be booked through other comprehensive income. b. be booked through net income. c..
4 Views
View Answer
Pr. 15-149—Equity transactions. Sands Corporation has the following capital structure at the beginning of this year: Instructions (a) Record the following transactions which occurred consecutively this year. Show all calculations. 1. There are no dividends in arrears. A total cash dividend of $90,000 was declared. The preferred shares are participating to a maximum of.
5 Views
View Answer
Ex. 15-141—Lump sum issuance of par value shares. Cole Corporation issued 2,000 common shares and 400 preferred shares for a lump sum of $72,000 cash. Instructions (a) Prepare the journal entry for the issuance, assuming the par value of the common was $5 and the market value $30, and the par value of.
4 Views
View Answer
26. Dividends on term preferred shares, where the shares have been recorded as a liability, should be debited to a. interest expense. b. retained earnings. c. contributed surplus. d. other comprehensive income. 27. Under a (non-compensatory) employee stock option plan (ESOP), when an option is sold to an employee, the employer debits Cash and credits a..
5 Views
View Answer
Ex. 15-139—Dividends on preferred shares. Graziano Corp. has been authorized to issue 20,000 no par, $6, cumulative and fully participating preferred shares and 100,000 no par common shares. The account balances at December 31, 2012 are: No dividends were paid in 2011. The corporation now desires to pay $280,000 in dividends. Instructions Calculate how.
5 Views
View Answer
Pr. 15-151--Statement of Shareholders’ Equity. Following is information provided by Goshawk Inc for their last two year ends: Instructions In good format, prepare a Statement of Shareholder’s Equity for the year ended December 31, 2012.       .
5 Views
View Answer
21. When all of the outstanding preferred shares are purchased and retired by the issuing corporation for less than the original issue price, accounting for the retirement increases a. the amount of dividends available to common shareholders. b. the contributed capital of the common shareholders. c. reported income for the period. d. the treasury.
4 Views
View Answer
66. Portage International Ltd. issued $4,000,000, 5-year, 8% convertible bonds at par. Each $1,000 bond is convertible to 200 of Portage’s no par value common shares, which are currently trading at $25 each. The current market rate for similar non-convertible bonds is 10%. Assuming Portage adheres to IFRS, the value.
4 Views
View Answer
Pr. 16-91—Hedging (forward contract). On May 1, 2012, Moonbucks Corp, a coffee wholesaler, placed an order with its supplier for six tons of coffee beans, to be delivered and paid for on September 30, 2012. At this time, the spot (current) price for one ton of coffee is $3,000, and the.
5 Views
View Answer
21. Convertible bonds a. have priority over all other types of bonds. b. are usually secured by a first or second mortgage. c. pay interest only in the event earnings are sufficient to cover the interest. d. may usually be exchanged for common shares. 22. A common reason for issuing convertible bonds is a. to obtain.
4 Views
View Answer
PROBLEMS Pr. 16-87—Forward contract. Holmes Home Builders Ltd. uses fir 2x6 lumber as its framing material. On November 15, 2012, Holmes enters into a forward contract for 1,500,000 board feet of lumber at $0.25 per board foot for March 2013 delivery. At December 31, 2012, the market price for March delivery is.
4 Views
View Answer
MULTIPLE CHOICE—Computational 41. On July 5, 2012, Alpha Corp. purchased a call option for $1,200, giving it the right to buy 1,000 shares of Omega Corp. for $20 per share. On August 18, 2012, when the option value is $6,000, Omega settles the option for cash. The entry on Alpha’s books to.
5 Views
View Answer
MULTIPLE CHOICE—Conceptual 1. Derivative instruments a. require significant investments. b. transfer financial risks. c. transfer primary instruments. d. are settled at the date of issuance. 2. Derivatives exist to help companies a. hide financial irregularities. b. reduce interest expense. c. manage cash flows. d. manage risks. 3. Credit risk is the risk that a. an instrument’s price or value will change. b. the.
5 Views
View Answer
Pr. 16-88—Convertible bonds and warrants. For each of the unrelated situations described below, prepare the entry(ies) required to record the transactions. 1. On August 1, 2012, Alpha Corporation called its 10% convertible bonds for conversion. The $4,000,000 par value bonds were converted into 160,000 no par common shares. On August 1, there.
4 Views
View Answer
Ex. 16-80—Convertible bonds. On December 1, 2012, Balwinder Corp. issued $5,000,000 (par value), 12%, 5-year convertible bonds for $5,026,000 plus accrued interest. The bonds were dated April 1, 2012 with interest payable April 1 and October 1. If the bonds had not been convertible, they would have sold for $5,006,000. Bond.
4 Views
View Answer
Pr. 15-152--Dividend distribution. You have recently been appointed CEO of Dumbledore Ltd, a wholesale distributor of magic supplies. One day your CFO reminds you that next week you will have to make recommendations to the board of directors regarding this year’s annual dividend. This catches you totally by surprise. Luckily, the.
6 Views
View Answer
Ex. 15-143—Treasury shares. Zhou Ltd currently has 150,000 no par common shares outstanding, carrying value $4,050,000. Instructions Record the following transactions. (a) Purchased 1,500 common shares at $29 per share, to be held as treasury shares. (b) Sold 800 treasury shares at $30 a share. (c) Retired the rest of the treasury shares.       .
4 Views
View Answer
Pr. 15-148—Allocation of cash dividends. Tracey Inc has the following shares outstanding: 40,000, $0.80, no par value preferred shares$400,000 60,000 no par value common shares$600,000 All shares were sold for $100 each. No dividends have been declared since December 31, 2009. It is now December 31, 2012, and the board of directors wants to distribute.
4 Views
View Answer
Ex. 15-144—Financial reorganization. The following shareholders’ equity accounts are reported by India Inc. at December 31, 2012. A financial reorganization was approved. Equipment is to be written down $58,600, and inventory increased $4,200. Instructions Prepare the required journal entries for the financial reorganization.       .
4 Views
View Answer
Ex. 16-79—Put options. On November 15, 2012, Rowena Inc. purchases a held-for-trading investment for $500,000. Rowena also enters into a put option to sell the shares for $500,000. At December 31, 2012, the investment is valued at $510,000. Instructions Record any adjusting entry(ies) required at December 31, 2012 under hedge accounting.       .
4 Views
View Answer
Pr. 15-150—Share retirement and stock dividends. Han Enterprises reported the following shareholder’s equity at December 31, 2011. The following transactions took place in 2012: Instructions Prepare journal entries for the 2012 transactions.       .
4 Views
View Answer
31. If a corporation wishes to "capitalize" part of their earnings, it may issue a a. cash dividend. b. stock dividend. c. property dividend. d. liquidating dividend. 32. Which type of dividends do not reduce shareholders' equity? a. Cash dividends. b. Stock dividends. c. Property dividends. d. Liquidating dividends. 33. The declaration and issuance of a stock dividend larger than.
4 Views
View Answer
16. An advantage of issuing debt instead of equity is that a. interest must be paid, regardless of earnings. b. the interest is tax deductible. c. it increases solvency or liquidity risks. d. no leverage is possible. 17. With regard to the measurement of hybrid/compound instruments, which of the following statements is correct? a. IFRS requires.
5 Views
View Answer
Pr. 16-90—Interest rate swap. On January 1, 2012, Maquino Ltd. issues a floating rate bond for $1,000,000. At the same time Maquino enters into an interest rate swap whereby it agrees to pay interest on $1,000,000 at 105 (the current interest rate) and to receive payments based on the floating rate..
4 Views
View Answer
PROBLEMS Pr. 15-146—Issuance of shares for cash, non-cash consideration, and by subscription. Presented below is information related to Shane Corp: 1. The company is granted a charter that authorizes issuance of 15,000 no par preferred shares and 40,000 no par common shares. 2. 10,000 common shares are issued for land with a fair.
4 Views
View Answer
11. In jurisdictions where par value shares are legally allowed, the only real significance of par value is a. to enable the shares to be callable or convertible. b. to require the corporation to pay dividends. c. to establish the maximum responsibility of a shareholder in the event of insolvency. d. to establish the.
5 Views
View Answer
Ex. 16-86—Stock appreciation rights. On January 1, 2011, Hay Ltd. established a stock appreciation rights (SAR) plan for its executives. They could receive cash at any time during the next four years equal to the difference between the market price of the common shares and a pre-established price of $16 for.
4 Views
View Answer

Can't find what you're looking for ?

Ask our exprts a study questions, on us.
Get free Homework Help*