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Study Resources (Accounting)

12) Who uses information about "equity" and what information about equity is useful to financial statement users? 13) Explain the meaning of "contributed capital" and "common share." What distinguishes a common share from a preferred share? 14) Explain the meaning of "par value," "contributed surplus," and "preferred shares." .
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8) Which transaction would not affect retained earnings? Issue preferred shares1,500,500 Issue common shares2,300,000 Declare dividends on common shares100,500 Stock split400,000 Skipping dividend payment on preferred shares200,000 9) When shares are repurchased at an amount different from their original issue price, then held in treasury or cancelled, will the journal entry affect the following components? Share capital Contributed.
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12.3   Learning Objective 3 1) How should non-current financial liabilities be recorded initially? A) At face value. B) At fair value. C) At fair value less transactions costs. D) At face value less transactions costs. 2) Non-current debt instruments exchanged for assets are recognized at: A) book value. B) fair value. C) cash paid. D) cash equivalents paid. 3) What is.
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13.4   Learning Objective 4 1) When does a company record dividends payable? A) On date of record. B) On ex-dividend date. C) On payment date. D) On declaration date. 2) What is the "ex-dividend" date for the Toronto Stock Exchange? A) 2 business days after the declaration date. B) 2 business days after the date of record. C) 2.
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11) Explain the meaning of financial leverage and leveraged buyout. 12) Bank Buy Inc. is in the process of acquiring another business. In light of the acquisition, shareholders are currently re-evaluating the appropriateness of the firm's capital structure (the types of and relative levels of debt and equity). The two proposals.
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12.4   Learning Objective 4 1) When can a non-current liability not be derecognized? A) When the company discharges the obligation or it expires. B) When the company pays the debt and continues to be liable for the liability. C) When the underlying debt contract is canceled. D) When the creditor provides the services specified in.
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17) Cynthia Dixie Accounting Inc. takes advantage of a well-known office furnishings store's low-interest-rate financing. Cynthia buys furniture on the first day of its fiscal year, signing a $19,000, five-year note. The note is payable in full at maturity. Interest is payable annually at 2%. The market rate of interest.
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42) LMZ Computer Systems Inc. maintains office equipment under contract. The contracts are for labour only; customers must reimburse LMZ for parts. LMZ's rate schedule follows: One year Two years Three years Photocopies $220 400 620 Fax machine $175 340 440 LMZ's 2018 sales of maintenance agreements is set out below: One year Two years Three years Photocopies 20 12 30 Fax machine 24 20 30 Requirements: Assuming that sales occurred evenly through the year: a..
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12.5   Learning Objective 5 1) Which standard does not need to be considered when considering the disclosure and presentation of non-current liabilities? A) IAS 1, Presentation of Financial Statements B) IAS 36, Impairment C) IFRS 7, Financial Instruments: Disclosures D) IAS 39, Financial Instruments: Recognition and Measurement 2) Sarah Braun is the owner of Sarah's Shameless.
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6) Mountip Inc. was incorporated under provincial legislation with a December 31 year-end. The company has a single class of shares. As at December 31, 2011, it had 150,000 shares issued and outstanding. These shares had a book value of $5,700,000 on the balance sheet. During 2012, Mountip repurchased 5%.
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13) Blue Corp is in the process of acquiring another business. In light of the acquisition, shareholders are currently re-evaluating the appropriateness of the firm's capital structure (the types of and relative levels of debt and equity). The two proposals being contemplated are detailed below: Proposal 1 Proposal 2 Estimated earnings before income.
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16) Which statement about contributed surplus is correct? A) Contributed surplus can only arise from the issuance of shares. B) Contributed surplus can arise from the issuance of stock options. C) Contributed surplus arising from share repurchase gives rise to a debit journal entry. D) Contributed surplus arising from share issuance gives rise to.
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14) Fredericton Aerospace Inc. raised $5,369,210 by selling $5,000,000 of six-year, 12% bonds dated January 1, 2013. Fredericton used part of the proceeds to pay its investment bank's fee of $100,000 and related legal and accounting fees of $600,000. Interest is payable on June 30 and December 31 each year. Fredericton.
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15) Explain how non-current liabilities are measured after initial recognition. 16) On May 1, 2012, Sea Escape Ltd. purchases a new automobile for $18,000 from the dealer who provides the financing. The three-year, interest-free loan is repayable at $500 per month. The market rate of interest for similar transactions is 0.25%.
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8) Great-West Lifeco Inc. announced the following share issuances:   March 1, 2008 10,000,000 2% non-cumulative five-year rate reset first preferred shares (series J) for par value of $12 each. After five years the dividend rate will be reset to the five-year Canada bond rate plus 3.35%. Dividends are payable as declared by.
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12.1   Learning Objective 1 1) Which statement best explains the concept of "leverage"? A) A measure of the efficiency of the company. B) A measure of solvency of the company. C) A measure of the company's operations. D) A measure of the company's debt-paying ability. 2) What are "non-current liabilities"? A) Obligations that are expected to be.
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10) Below are details relating to balances for the equity accounts of Isha Company, and changes to those balances. Note that AOCI is accumulated other comprehensive income. Balance or changes                       Amount ($000's) Common stock, 2011, Jan 150,000 Unappropriated retained earnings, 2011, Jan 139,000 Appropriated retained earnings for sinking fund reserve, 2011, Jan 1              3,200 AOCI from.
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8) Below are details relating to balances for the equity accounts of Cauvet Company, and changes to those balances. Note that AOCI is accumulated other comprehensive income. Balance or changesAmount ($000's) Common stock, 2011, Jan 170,000 Unappropriated retained earnings, 2011, Jan 1139,000 Appropriated retained earnings for sinking fund reserve, 2011, Jan 1              3,200 AOCI from.
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7) Explain the difference between "probable," "possible," and "remote" under IFRS. 8) Which statement about contingencies is correct? A) If the future outcome is remote but reliably measurable, a provision is recorded. B) If the future outcome is remote, but not reliably measurable, disclosure is required. C) If the future outcome is remote, but.
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18) Which is an example of "contributed capital"? A) Retained earnings. B) Preferred shares. C) Other comprehensive income. D) Accumulated other comprehensive income. 19) Which is an example of "contributed capital"? A) Appropriated reserves. B) Unappropriated retained earnings. C) Common shares. D) Accumulated other comprehensive income. 20) In which account would "transactions with owners" be reported? A) Appropriated reserves. B) Unappropriated retained.
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10) Explain what an "in-substance defeasance" is and whether this arrangement results in the derecognition of a financial liability. 11) Missouri Wheels Ltd. (MW) sold $9,000,000 of fourteen-year, 3% bonds at par on January 1, 2012. Interest is payable on June 30 and December 31 each year. The bonds can be.
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21) Canadian Sea Rides Ltd. issues $8,000,000 of four-year, 4% bonds dated January 1,2011. Interest is payable on January 1 and July 1 each year. The proceeds realized from the issue were the $8,529,082 sales price less the $50,000 fee charged by Sea's lawyers. Sea's year-end is December 31. Requirement: Prepare entries.
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12.2   Learning Objective 2 1) Why do bonds often include covenants? A) To reduce information asymmetry. B) To reduce moral hazard. C) To compensate for value-added services. D) To ensure repayment of the bond. 2) What is a "covenant"? A) Guarantee of the price to the borrower. B) Contract that outlines the terms of the borrowing agreement. C) Promise.
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3) For each independent situation: 1. Moosehead Pool and Skeet Com.'s debt to equity ratio is 1.6: 1 based on its draft financial statements for the year ended December 31, 2016. This leverage ratio exceeds the 1.5:1 maximum stipulated in Moosehead's loan agreement pertaining to a $5,000,000 loan maturing on March.
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12) The following is an extract from the balance sheet as at December 31, 1011: Preferred shares, $4 per share non-cumulative dividend, redeemable $125,000 at $6 per share, 250,000 authorized, 25,000 issued and outstanding Common stock, 60,000,000 authorized, 6,000,000 issued and outstanding              6,019,233 Contributed surplus—preferred shares from repurchase and resales50,000 Retained earnings     9,281,092 Total shareholders' equity$15,475,325 The.
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13.2   Learning Objective 2 1) What kind of transaction is "appropriated reserves"? A) An example of "contributed surplus." B) An example of a transaction with owners. C) An example of a "contributed capital." D) An example of a transaction with non-owners. 2) What kind of transaction is "appropriated reserves"? A) An example of "par value" preferred shares. B).
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15) Consider the following independent situations. The underlined entity is the reporting entity. 1. Call Cattle Inc. sued Nutrient Feed Ltd. for $10 million alleging breach of contract. Nutrient's legal counsel estimates that Call's likelihood of success is about 80%. Based on its experience with cases of this nature, the law.
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11.3   Learning Objective 3 1) Which statement about contingencies is correct? A) It involves only potential economic outflows of resources. B) It is a possible condition that depends upon the outcome of a future event. C) It involves uncertainty about either the timing or amount of payment. D) It is an existing condition that depends.
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23) Really Amazing Vacations Ltd. issues $1,000,000 of ten-year, 10% bonds dated January 1,2012. Interest is payable on January 1 and July 1 each year. The proceeds realized from the issue were the $1,048,801 sales price less the $80,000 fee charged by Really Amazing's investment bank. Really Amazing's year-end is.
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13.3   Learning Objective 3 1) What is the significance of "par value" for accounting purposes? A) The par value determines the amount of contributed surplus. B) Par value has no economic significance for accounting purposes. C) Par values determines the amount of cash received from investors. D) Par value shares are not permitted under IFRS.
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13) Based on the characteristics provided below, what kind of bond is being discussed? 1.________ are a set of bonds issued at the same time but that mature at regular scheduled dates rather than all on the same date. 2.________ are bonds that never mature. 3.________ allow the holder to exchange the bond.
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15) There are three independent situations summarized below. In all three cases the bonds are sold on January 1, 2011 and the issuing company has a December 31 year-end. In situation three, the bonds were all repurchased at par on January 1, 2015. Situation 1Situation 2Situation 3 Face value30,000,00015,000,00030,000,000 Coupon rate12%12%12% Coupon dates6/30; 12/3112/3112/31 Market.
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4) Here is an extract of a trial balance for Lipika Inc. Indicate which accounts would be reported under the "retained earnings" section of the balance sheet. Investment in common shares of XPedious Corp              104,560 Preferred shares135,000 Treasury shares10,000 Other comprehensive income45,000 Accumulated other comprehensive income67,500 Bonds payable101,400 Unappropriated retained earnings90,000 Provision for doubtful accounts35,500 Appropriated retained earnings8,500 5) Here.
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11.4   Learning Objective 4 1) Which statement is not correct about commitments? A) A commitment to buy equipment must be disclosed if the contract is partially executed. B) A commitment to buy equipment must be disclosed even if the contract is unexecuted. C) Onerous contracts must be disclosed if they can be reliably measured. D).
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11.5   Comprehensive 1) For each independent situation: 1. A former employee of Melvin Minimarket Inc. sued the company for $900,000, alleging that the company owner sexually harassed her. Melvin's lawyers suggest that the lawsuit has a 30-40% probability of success and that, if successful, the plaintiff will be awarded between $400,000 and.
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13.1   Learning Objective 1 1) Which statement about "equity" is not correct? A) Equity is the ownership interest in the company. B) Equity is the residual interest in the company. C) It is not necessary to provide information about the equity. D) Equity is the difference between assets and liabilities. 2) What does "priority" mean? A) Higher.
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6) Here is an extract of a trial balance for Masterious Ltd. Indicate which are examples of transactions with non-owners. Investment in common shares of XPedious Corp              104,560 Preferred shares135,000 Common shares100,000 Treasury shares10,000 Contributed surplus—preferred shares5,000 Other comprehensive income45,000 Accumulated other comprehensive income67,500 Bonds payable101,400 Unappropriated retained earnings90,000 Provision for doubtful accounts35,500 Appropriated retained earnings8,500 7) Here is an extract of.
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