Question: ASPE does not permit the correction of

> What are the accounting problems related to the presentation of interim data?

> Assets for the seven industry segments of Penner Corp. are as follows: Based only on the assets test, which industry segments are reportable under IFRS? (thousands) (thousands) $500 550 400 $200 150 475 Gamma Suh Kennedy RGD Tsui Nuhn Red Moon 400

> Operating profits and losses for the seven industry segments of Penner Corp. are as follows: Based only on the operating profit (loss) test, which industry segments are reportable under IFRS? (thousands) (thousands) $90 (40) Gamma Suh $(20) Kennedy

> Refer to the information in E19-7 about Berstler Limited’s defined benefit pension plan. Instructions: (a) Prepare a 2017 pension work sheet with supplementary schedules of calculations. (b) Prepare the journal entries at December 31,

> Penner Corp. has seven industry segments with total revenues as follows: Based only on the revenues test, which industry segments are reportable under IFRS? Which industry segments are reportable under ASPE? (thousands) (thousands) $600 650 Gamma S

> The IASB regularly updates and publishes a project plan that outlines the timelines for the projects it is working on. Instructions: Using the IASB website (www.ifrs.org), identify new standards that have been recently released. Review the transitional

> Mahi Bai, a student of intermediate accounting, was heard to remark after a class discussion on segmented reporting: “All this is very confusing to me. First we are told that there is merit in presenting the consolidated results and now we are told that

> Uddin Industries Ltd. has had a long history of regular quarterly dividend payments to its common shareholders. The president wants Uddin’s dividend policy to be mentioned in the summary of significant accounting policies note to the financial statements

> An annual report of Ford Motor Company states: “Net income a share is computed based upon the average number of shares of capital stock of all classes outstanding. Additional shares of common stock may be issued or delivered in the future on conversion o

> An annual report of Maleki Enterprises Ltd. states: “The company and its subsidiaries have long-term leases expiring on various dates after December 31, 2017. Amounts payable under such commitments, without reduction for related rental income, are expect

> What type of disclosure or accounting is necessary for each of the following items? (a) Because of a general increase in the number of labor disputes and strikes, both within and outside the industry, there is more chance that a company will suffer a cos

> Discuss why full disclosure is essential to the proper functioning of capital markets, and why private companies following ASPE may be subject to fewer disclosure requirements.

> Azure Ltd. had the following 2017 income statement data Sales……………………………………………………………………………………$ 205,000 Cost of goods sold…………………………………………………………………….120,000 Gross profit……………………………………………………………………………….85,000 Operating expenses (includes depreciation of $2

> Wong Textiles Ltd. entered into a capital lease obligation during 2017 to acquire a cutting machine. The amount recorded to the Equipment under Lease account and the corresponding Obligations under Lease account was $85,000 at the date of signing the lea

> Berstler Limited sponsors a defined benefit pension plan, and follows ASPE. The corporation’s actuary provides the following information about the plan (in thousands of dollars): Instructions: (a) Calculate the actual return on the pl

> In 2017, Abbotsford Inc. issued 1,000 common shares for land with a fair market value of $149,000. (a) Prepare Abbotsford’s journal entry to record the transaction. (b) Indicate the effect that the transaction has on cash. (c) Indicate how the transactio

> Watson Corporation, which uses IFRS, is using the indirect method to prepare its 2017 statement of cash flows and chooses to classify dividends paid as financing activities and interest paid as operating activities on the statement of cash flows. A list

> Access the financial statements of Airbus Group NV for its year ended December 31, 2014 from the company’s website at www.airbusgroup.com. Note 1 to its financial statements indicates that Airbus Group’s core business involves “the manufacturing of comme

> Tang Corporation, which follows IFRS and chooses to classify dividends paid as financing activities and interest paid as operating activities on the statement of cash flows, had the following activities in 2017. 1. Paid $870,000 of accounts payable. 2. P

> Maddox Corporation had the following activities in 2017. 1. Sold land for $180,000. 2. Purchased an FV-NI investment in common shares for $15,000. 3. Purchased inventory for $845,000 for cash. 4. Received $73,000 cash from bank borrowings. 5. Received i

> Mullins Corp. reported the following items on its June 30, 2017 trial balance and on its comparative trial balance one year earlier: Determine the June 30, 2017 cash and cash equivalents amount for the 2017 statement of cash flows, and calculate the ch

> Lantaigne Inc. entered into a seven-year lease of equipment from Weingartner Inc. At the lease’s inception, it is estimated that the equipment has an economic life of 10 years and fair value of $450,000. Present value of minimum lease payments of $75,000

> Use the information for Wing Corporation and Sharda Inc. from BE20-23. Assume that Sharda, the lessor, has a June 30 year end. Prepare Sharda’s entry on August 15, 2017 and any adjusting entry needed on June 30, 2018. Data from BE20-23: Wing Corporatio

> Wing Corporation enters into a lease with Sharda Inc., a lessor, on August 15, 2017 that does not transfer ownership or contain a bargain purchase option, and it is not for specialized equipment. Both Wing and Sharda use IAS 17. The lease covers three ye

> On January 1, 2017, Quong Corporation (the lessee) entered into a four-year, non-cancellable equipment lease contract with Zareiga Inc. (the lessor). The present value of the minimum lease payments required was $116,025. Also at lease inception, it was e

> Qui Importers provides the following pension plan information: Fair value of pension plan assets, January 1, 2017…………………………$1,438,750 Fair value of pension plan assets, December 31, 2017………………………1,586,875 Contributions to the plan in 2017………………………………………

> Use the information provided in BE20-20 about Lessee Corp. Assume that title to the property will not be transferred to Lessee by the end of the lease term and that there is also no bargain purchase option, but that the lease does meet other criteria to

> Lessee Corp. agreed to lease property from Lessor Corp. effective January 1, 2017, for an annual payment of $30,877, beginning January 1, 2017. The property is made up of land with a fair value of $120,000 and a two-story office building with a fair valu

> As at December 31, 2017, Bajac Inc. has the following balances: cash in bank, $108,000; investment in preferred shares (retractable, purchased by Bajac within 90 days of maturity date), $120,000; investment in common shares (to be sold within 30 days), 9

> Refer to the specimen financial statements at the end of the book, which show excerpts from the 2014 year-end financial statements, including the accompanying notes, of Brookfield Asset Management Inc. The full financial statements are available on SEDAR

> The following statement is an excerpt from a document on interim financial reporting: Interim financial information is essential to provide investors and others with timely information about the progress of the enterprise. The usefulness of such informat

> On January 1, 2017, Animation Ltd., which uses ASPE, sold a truck to Letourneau Finance Corp. for $65,000 and immediately leased it back. The truck was carried on Animation’s books at $53,000, net of $26,000 of accumulated depreciation. The term of the l

> During 2017, Yang Inc., which reports under IFRS and has adopted the policy of classifying interest received as an investing activity, lent $30,000 to a key supplier in exchange for a two-year interest-bearing promissory note. Interest revenue earned on

> In 2017, Oswald Corporation reported a net loss of $56,000. Oswald’s only net income adjustments were depreciation expense of $67,000 and an increase in accounts receivable of $8,100. Calculate Oswald’s net cash provided (used) by operating activities us

> October Corporation reported net income of $46,000 in 2017. Depreciation expense was $17,000 and unrealized losses on FV-NI investments were $3,000. The following accounts changed as indicated in 2017: Accounts Receivable……………………………………………$ 11,000 increa

> Lupasco Ltd. had the following 2017 income statement data: Revenues……………………â€&brvb

> Instructions: Complete the following tables by indicating whether the following events increase (I), decrease (D), or have no effect (NE) on the employer’s defined benefit obligation, the pension plan assets, the pension planâ&#12

> Kamsky Inc., which follows IFRS, had the following balances and amounts appear on its comparative financial statements at year end: (a) Calculate income taxes paid in 2017 and discuss the related disclosure requirements under IFRS, if any. (b) If Kamsk

> Ciao Corporation had January 1 and December 31 balances as follows: For 2017, the cost of goods sold was $550,000. Calculate Ciao’s 2017 cash paid to suppliers of inventory. 1/1/17 12/31/17 Inventory Accounts payable $90,000 61,00

> At January 1, 2017, Apex Inc. had accounts receivable of $72,000. At December 31, 2017, the accounts receivable balance was $59,000. Sales revenue for 2017 was $420,000. Sales returns and allowances for the year were $10,000. Purchase discounts were in t

> Using the information from BE22-9 for Azure Ltd., (a) prepare the cash flows from operating activities section of Azure’s 2017 statement of cash flows using the indirect method and following IFRS. (b) How would the disclosure requirements differ under AS

> Alvarado Ltd., a private company, has reported increasing profit every year for the past fi ve years. Alvarado would like to expand operations by adding three new retail stores within the next three years, and is seeking a loan from its bank to help fund

> Instructions: Contact an automobile dealership and find out the full out-of-pocket cost of purchasing a specific model of car if you were to pay cash for it. Also find out the details of the costs that are associated with leasing the same model car. Answ

> Noland Corporation decided at the beginning of 2017 to change from the declining-balance method of depreciating its capital assets to the straight-line method because the straight-line method better represents the pattern of benefits provided by the capi

> At January 1, 2017, Baker Corp. reported retained earnings of $2 million. In 2017, Baker discovered that 2016 depreciation expense was understated in error by $500,000. In 2017, net income was $800,000 and dividends declared were $195,000. The tax rate i

> In 2017, Dody Corporation discovered that equipment purchased on January 1, 2015 for $145,000 was expensed in error at that time. The equipment should have been depreciated over five years, with no residual value. The tax rate is 30%. Prepare Dody’s 2017

> Chang Limited is in the development phase of creating a new form of medicine. In the past, the company has always capitalized development costs as long as the criteria under IFRS and ASPE were met. Chang would now like to expense these costs. Discuss the

> Refer to the information for Rebek Corporation in E19-3. Instructions: (a) Prepare a pension work sheet: insert the January 1, 2017 balances and show the December 31, 2017 balances. (b) Prepare all journal entries. (c) What is the amount of the plan’s s

> Talbert, Inc. changed from the weighted average cost formula to the FIFO cost formula in 2017. The increase in the prior year’s income before tax as a result of this change is $228,000. The tax rate is 30%. Prepare Talbert’s 2017 journal entry to record

> At the beginning of 2017, Armstead Corporation discovered that depreciation expense in the years prior to 2017 was incorrectly calculated and recorded. For the years before 2017, total depreciation expense of $165,000 was recorded, whereas correct total

> Palmer Corp. is evaluating the appropriate accounting for the following items under ASPE: 1. Management has decided to switch from the FIFO inventory cost formula to the weighted average cost formula for all inventories. 2. When the year-end physical inv

> On January 1, 2017, Clark Inc. sold a piece of equipment to Daye Ltd. for $200,000, and immediately leased the equipment back. At the time, the equipment was carried on Clark’s books at a cost of $300,000, less accumulated depreciation of $120,000. The l

> Use the information for Regina Corporation from BE20-16. Assume instead that the residual value is not guaranteed. Prepare Regina’s May 29, 2017 journal entries. Data from BE20-16: Regina Corporation, which uses ASPE, manufactures replicators. On May 2

> Chorus Aviation Inc. is a Canadian aviation holding company that provides, through Jazz Aviation LP, a “significant part of Air Canada’s domestic and trans border network.” Chorus indicates in Note 1 to its financial statements that it is both economical

> Regina Corporation, which uses ASPE, manufactures replicators. On May 29, 2017, it leased to Barnes Limited a replicator that cost $265,000 to manufacture and usually sells for $410,000. The lease agreement covers the replicator’s five-year useful life a

> Use the information for Lai Corporation from BE20-14. Assume that, instead of costing Lai $175,000, the equipment was manufactured by Lai at a cost of $137,500 and the equipment’s regular selling price is $175,000. Prepare Lai Corporation’s January 1, 20

> Lai Corporation, which uses ASPE, leased equipment it had specifically purchased at a cost of $175,000 for Swander, the lessee. The term of the lease is six years, beginning January 1, 2017, with equal rental payments of $33,574 at the beginning of each

> Rebek Corporation provides the following information about its defined benefit pension plan for the year 2017: Current service cost………………………………………………………………..$ 235,000 Contribution to the plan……………………………………………………………..262,500 Past service cost, effective

> Use the information for Merrill Corporation from BE20-11. Assume that for Moxey Corporation, the lessor, collectability is reasonably predictable, there are no important uncertainties concerning costs, and the equipment’s carrying amount is $121,000. Pre

> Indicate the effect—understated (U), overstated (O), or no effect (NE)—that each of the following errors has on 2016 net income and 2017 net income: 2016 2017 Wages payable were not recorded at Dec. 31, 2016. Equi

> Bailey Corp. changed depreciation methods in 2017 from straight-line to double-declining-balance because management gathered evidence that the assets were being used differently than previously thought. The assets involved were acquired early in 2014 for

> Quinlan Corporation purchased a computer system (accounted for as Office Equipment) for $60,000 on January 1, 2015. It was depreciated based on a seven-year life and an $18,000 residual value. On January 1, 2017, Quinlan revised these estimates to a tota

> Netson Manufacturing Corp. is preparing its year-end financial statements and is considering the accounting for the following items: 1. The vice president of sales had indicated that one product line has lost its customer appeal and will be phased out ov

> Use the information for McCormick Ltd. from BE20-8. Assume that at December 31, 2017, McCormick made an adjusting entry to accrue interest expense of $8,296 on the lease. Prepare McCormick’s May 1, 2018 journal entry to record the second lease payment of

> McCormick Ltd., a public company following IFRS 16, recorded a right-of-use asset and lease liability at $150,000 on May 1, 2017. The interest rate is 10%. McCormick made the first lease payment of $25,561 on May 1, 2017. The lease requires a total of ei

> The accounting for operating leases has been a controversial issue. Many observers argue that firms that use operating leases are using significantly more assets and are more highly leveraged than their financial statements indicate. As a result, analyst

> Use the information for Lalonde and Costner from BE20-6. Using tables, a financial calculator, or Excel functions, illustrate how Costner determined the amount of the lease payment of $25,173. Data from BE20-6: Lalonde Ltd., a public company following

> Lalonde Ltd., a public company following IFRS 16, recently signed a lease for equipment from Costner Ltd. The lease term is five years and requires equal rental payments of $25,173 at the beginning of each year. The equipment has a fair value at the leas

> Access the Bombardier Inc. financial statements for the year ended December 31, 2014, which can be found on SEDAR (www.sedar.com). Instructions: (a) The company has many different types of shares authorized, issued, and/or outstanding at the end of 2014

> Coa Corporation recently needed to find temporary inventory storage space when transitioning from an old factory to a newly built factory within the same city. Coa signed a 10-month lease on a warehouse requiring monthly payments in advance of $14,500. (

> Blane Inc. entered into a five-year lease of equipment from Zdrinka Inc. At the lease’s inception, it is estimated that the equipment has an economic life of eight years and fair value of $250,000. Present value of minimum lease payments amounts to $215,

> Lee Ltd. recently signed a lease for equipment from Photon Inc. The lease term is five years and requires equal rental payments of $32,000 at the beginning of each year. The equipment has a fair value at the lease’s inception of $140,000, an estimated us

> Turcotte Limited, a public company following IFRS 16, decided to upgrade the coffee machines in all of its office locations. Turcotte leased 50 machines from Coffee Tyme Ltd. on July 1, 2017 (to purchase the coffee machines instead would cost Turcotte $3

> Use the information for Merrill Corporation from BE20-11. Assume that a residual value of $17,000 is expected at the end of the lease, but that Merrill does not guarantee the residual value. Using tables, a financial calculator, or Excel functions, calcu

> Merrill Corporation, which uses ASPE, enters into a six-year lease of equipment on September 13, 2017 that requires six annual payments of $28,000 each, beginning September 13, 2017. In addition, Merrill guarantees the lessor a residual value of $17,000

> Langlois Services Inc. accounts for right-of-use assets under IFRS 16 for a lease of a truck. The lease includes a residual value guarantee at the end of the term of the lease of $16,000. Langlois estimates that the likelihood for the residual value of $

> Lagace Ltd. entered into a lease on June 1, 2017. The lease term is six years and requires annual rental payments of $30,000 at the beginning of each year. Lagace’s incremental borrowing rate is 8% and the rate implicit in the lease is 9%. (a) Calculate

> Access the annual financial statements, including the accompanying notes, of Loblaw Companies Limited for its 52 weeks ended January 2, 2016. These can be found on SEDAR (www.sedar.com) or the company’s website. Review the principal statements and the no

> Duster Corporation is a private company with a defined benefit pension plan. The following information is available for Duster Corporation for 2017: Opening balance, DBO……………………………………………………………….$210,000 Opening balance, plan assets……………………………………………………….

> Access the annual report, including the audited financial statements, of Thomson Reuters Corporation for the year ended December 31, 2014 from SEDAR (www.sedar.com) or from the company’s website (www.thomsonreuters.com). Instructions: (a) What related-p

> Jonquière Corporation provides the following information about its defined benefit pension plan (in hundreds of thousands of dollars) for 2017: At the end of the year, Jonquière revised the terms of its pension plan, which resul

> At December 31, 2017, Glover Corporation provided you with the following information: Defined benefit obligation, December 31, 2017……………………………………$3,400,000 Plan assets at fair value, December 31, 2017…………………………………………..2,420,000 Past service c

> Refer to the information for Maya Corp. in BE19-4, and provide a continuity schedule for the plan assets for the year. Is the plan in a surplus or a deficit position at the end of the year? Data from BE19-4: Maya Corp. reports the following information

> For Castor Corporation, year-end plan assets were $1,753,000. At the beginning of the year, plan assets were $1,359,000. During the year, contributions to the pension fund were $170,000, while benefits paid were $130,000. Calculate Castor’s actual return

> Maya Corp. reports the following information (in hundreds of thousands of dollars) to you about its defined benefit pension plan for 2017: Provide a continuity schedule for the DBO for the year. Maya follows IFRS. $ 32 Actual return on plan assets

> Tika Corp. has recently decided to implement a pension plan for its employees; however, it is unsure if it would like to structure the pension as a defined contribution plan or a defined benefit plan. As requested by management, prepare a short memo outl

> Explain what performance-type plans are and how they differ from other types of compensatory plans.

> Using the information from BE18-3, prepare Nilson’s journal entry to record 2017 income tax. Assume a tax rate of 25% and that Nilson uses the taxes payable method of accounting for income taxes under ASPE. Data from BE18-3: Nilson Inc. had accounting

> Sonia Corporation has historically followed ASPE, but is considering a change to IFRS. It has temporary differences at December 31, 2017 that result in the following statement of financial position future income tax accounts: Deferred tax liability, cur

> IAS 19 Employee Benefits requires companies that have a surplus in a defined benefit plan to perform a “ceiling test” on the net benefit asset account. Instructions: Explain what an asset ceiling test is, why it is required, and how it is applied.

> Alliance Inc. reports the following incomes (losses) for both book and tax purposes (assume the carryback provision is used where possible): The tax rates listed were all enacted by the beginning of 2014. Instructions: (a) Prepare the journal entries

> Weiss Inc. reported income from continuing operations of $87,000 and a loss from discontinued operations of $16,000 in 2017, all before income taxes. All items are fully taxable and deductible for tax purposes. Prepare the bottom of the income statement

> Sandeep Corporation had income before income tax of $230,000 in 2017. Sandeep’s current tax expense is $43,000, and deferred tax expense is $27,000. (a) Prepare Sandeep’s 2017 income statement, beginning with income before income tax. (b) Calculate Sande

> In 2017, Borovya Limited purchased shares of Gurvir Corp. at a cost of $52,000. This was the first time the company had ever acquired an investment to be accounted for at fair value through other comprehensive income (FV-OCI). At December 31, 2017, the G

> Ditek Corp. provides a defined contribution pension plan for its employees. The plan requires Ditek to contribute 5% of employees’ gross pay to a fund trustee each year. Ditek’s total payroll for 2017 was $2,735,864. At the start of 2017, Ditek revised t

> At December 31, 2017, Tapper Corporation has a deferred tax asset of $420,000. After a careful review of all available evidence, it is determined that it is more likely than not that $85,000 of this deferred tax asset will not be realized. Prepare the ne

> Use the information for Kyle Inc. given in BE18-16. Assume now that Kyle earns taxable income of $25,000 in 2018 and that at the end of 2018 there is still too much uncertainty to recognize a deferred tax asset. Prepare all the journal entries that are n

> Refer to BE19-16 and Saver Corporation’s single-person defined benefit pension plan. If the change in the January 1, 2017 defined benefit obligation had been the result of an actuarial revaluation instead of a plan amendment, (a) determine the effect tha

> Saver Corporation ended its previous fiscal year with a defined benefit obligation of $137,888 and plan assets of $140,000. On January 1, 2017, the company amended its one-person defined benefit pension plan, resulting in a revised defined benefit obliga

> Legacy Corporation has the following information available concerning its post-retirement benefit plan for 2017: Current service cost……………………………………………………………………$130,000 Interest cost on DBO, discount rate at 6%............................................