Question: Melanie Corporation reported net income of $550,

> Mazur Corp. follows IFRS and began operations in 2020 and reported accounting income of $275,000 for the year. Mazur's CCA exceeded its book depreciation by $40,000. Mazur's tax rate for 2020 and years thereafter is 30%. In its December 31, 2020 statemen

> Sonia Corporation has historically followed ASPE, but is considering a change to IFRS. It has temporary differences at December 31, 2020, that result in the following SFP future income tax accounts: Indicate how these balances will be presented in Sonia

> Weiss Inc. reported income from continuing operations of $87,000 and a loss from discontinued operations of $16,000 in 2020, 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 2020. Sandeep's current tax expense is $43,000, and deferred tax expense is $27,000. a. Prepare Sandeep's 2020 income statement, beginning with income before income tax. b. Calculate Sande

> In 2020, 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, 2020, 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 2020 was $2,735,864. At the start of 2020, Ditek revised t

> At December 31, 2020, 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 2021 and that at the end of 2021 there is still too much uncertainty to recognize a deferred tax asset. Prepare all the journal entries that are n

> Access the annual financial statements, including the accompanying notes, of Loblaw Companies Limited for its 52 weeks ended December 30, 2017. These can be found on SEDAR (www.sedar.com) or the company’s website. Review the principal statements and the

> Refer to BE19.16 and Saver Corporation's one-person defined benefit pension plan. If the change in the January 1, 2020 defined benefit obligation had been the result of an actuarial revaluation instead of a plan amendment, a. determine the effect that t

> Saver Corporation ended its previous fiscal year with a defined benefit obligation of $137,888 and plan assets of $140,000. On January 1, 2020, 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 2020: Assuming Legacy follows IFRS, a. calculate Legacy's 2020 post-retirement benefit expense that will be included in net income. b. Calculate

> Petra Ltd. is preparing its financial statements for its year ended December 31, 2020, and has just obtained an actuarial pension valuation as at its year-end date. Prior to the actuarial valuation, Petra determined, based on the individual components of

> Monday Corporation sponsors a defined benefit pension plan and reports under IFRS. On January 1, 2020, the company reported plan assets of $1,000 and a defined benefit obligation of $1,100 (all amounts in thousands of dollars). During 2020, the current s

> Refer to the data provided about Rui Corporation's pension plan in BE19.11. Prepare a pension work sheet for Rui Corporation for 2020 assuming the company applies ASPE. From BE19.11: At January 1, 2020, Rui Corporation had plan assets of $250,000 and a

> At December 31, 2019, Chai Inc. had a deferred tax asset of $40,000. At December 31, 2020, the deferred tax asset is $62,000. The corporation's 2020 current tax expense is $70,000. What amount should Chai report as total 2020 income tax expense? Prepare

> Scott Enterprises Inc. sponsors a defined benefit plan for its 500 employees. On December 31, 2020, the company's actuary provided the following information related to the plan: defined benefit obligation $11.3 million, and fair value of plan assets $9 m

> Using the information from BE18.5, and assuming that the $40,000 difference is the only difference between Mazur's accounting income and taxable income, prepare the journal entry(ies) to record the current tax expense, deferred tax expense, income tax pa

> At December 31, 2020, Watzman Inc. owned equipment that had a book value of $178,000 and a tax base of $136,000 due to the use of different depreciation methods for accounting and tax purposes. The enacted tax rate is 30%. Calculate the amount that Watzm

> LGS Inc. is a private company. You have recently been hired as the CFO for the company and are currently finalizing the company year-end report for December 31, 2020. The company has an option to follow either IFRS or ASPE, and has not yet made the choic

> Myers Corp. purchased depreciable assets costing $30,000 on January 2, 2020. For tax purposes, the company uses CCA in a class that has a 30% rate. For financial reporting purposes, the company uses straight-line depreciation over five years. The enacted

> Using the information from BE18.3, calculate the effective rate of income tax for Nilson Inc. for 2020. Also make a reconciliation from the statutory rate to the effective rate, using percentages. Round to one decimal place. From BE18.3: Nilson Inc. had

> The following information is available for Roginski Corporation for 2020. 1. CCA that was reported on the 2020 tax return exceeded depreciation reported on the income statement by $160,000. This difference is expected to reverse in equal amounts of $40,

> In 2020, Noshy Corporation had accounting income of $234,000 and taxable income of $184,000. The difference is due to the use of different depreciation methods for tax and accounting purposes. The tax rate is 25%. Calculate the amount to be reported as i

> Use the information for Kyle Inc. given in BE18.16, but assume instead that it is more likely than not that the entire tax loss carryforward will not be realized in future years. Prepare all the journal entries that are necessary at the end of 2020 assum

> Kyle Inc. incurred a net operating loss of $580,000 in 2020. Combined income for 2017, 2018, and 2019 was $460,000. The tax rate for all years is 30%. Prepare the journal entries to record the benefits of the carryback and the carryforward, assuming it i

> Roper Corporation had the following tax information: In 2020, Roper suffered a net operating loss of $550,000, which it decided to carry back. The 2020 enacted tax rate is 25%. Prepare Roper's entry to record the effect of the loss carryback Year Ta

> At December 31, 2019, Palden Corporation had a deferred tax asset of $800,000, resulting from future deductible amounts of $3.2 million and an enacted tax rate of 25%. In May 2020, new income tax legislation is signed into law that raises the tax rate to

> Powell Corporation has a taxable temporary difference related to net book value versus UCC of $715,000 at December 31, 2020. This difference will reverse as follows: 2021, $53,000; 2022, $310,000; and 2023, $352,000. Enacted tax rates are 25% for 2021 an

> At December 31, 2019, Ambuir Corporation had a deferred tax liability of $35,000. At December 31, 2020, the deferred tax liability is $52,000. The corporation's 2020 current tax expense is $53,000. What amount should Ambuir report as total 2020 income ta

> Alimentation Couche-Tard Inc., Loblaw Companies Limited, and Empire Company Limited are three companies in the same industry. Because of this, the expectation is that their operations and financial positions are also similar. Instructions Go to SEDAR

> At December 31, 2020, Camille Corporation had an estimated warranty liability of $256,000 for accounting purposes and $0 for tax purposes. (The warranty costs are not deductible until they are paid.) The tax rate is 25%. Calculate the amount that Camille

> The 2020 income statement of Tanel Corporation showed net income of $860,000, which included a loss from discontinued operations of $140,000. Tanel had 25,000 common shares outstanding all year. a. Calculate earnings per share (EPS) for 2020 as it shoul

> Assume the same information as in BE17.7 except that on October 1, 2020, Laurin declared a 1- for-2 reverse stock split instead of a 10% stock dividend. Calculate the weighted average number of shares outstanding for Laurin for the year ended December 31

> Assume the same information as in BE17.7 except that on October 1, 2020, Laurin declared a 3- for-1 stock split instead of a 10% stock dividend. Calculate the weighted average number of shares outstanding for Laurin for the year ended December 31, 2020.

> Laurin Limited had 42,000 common shares outstanding on January 1, 2020. On March 1, 2020, Laurin issued 20,000 shares in exchange for equipment. On July 1, Laurin repurchased and cancelled 10,000 shares. On October 1, 2020, Laurin declared and issued a 1

> Dencil Corporation had 600,000 common shares outstanding on January 1, 2020. On March 1, 2020, Dencil issued 150,000 shares. On September 1, Dencil repurchased and cancelled 50,000 shares. Calculate Dencil's weighted average number of shares outstanding

> Assume the same information for Hedley Corporation as in BE17.3 except that the preferred shares are cumulative and the dividends have not yet been declared or paid. Calculate Hedley's 2020 earnings per share. Round to the nearest cent. From BE17.3: Hed

> Assume the same information for Hedley Corporation as in BE17.3 except that the preferred shares are non-cumulative and the dividend has not been declared or paid. Calculate Hedley's 2020 earnings per share. Round to the nearest cent. From BE17.3: Hedle

> Hedley Corporation had 2020 net income of $1.4 million. During 2020, Hedley paid a dividend of $5 per share on 100,000 preferred shares. Hedley also had 220,000 common shares outstanding during the year. Calculate Hedley's 2020 earnings per share. Round

> Spencer Ltd. established a SARs program on January 1, 2020, which entitles executives to receive cash at the date of exercise (any time in the next three years) for the difference between the shares' fair value and the pre-established price of $20 on 10,

> Potash Corporation of Saskatchewan Inc., Loblaw Companies Limited, and Air Canada are all Canadian companies with defined benefit plans as at December 31, 2017. Visit www.sedar.com to access financial statements for their 2017 fiscal years. (Note: Potash

> Applegate Inc. established a share appreciation rights (SARs) program on January 1, 2020, which entitles executives to receive cash at the date of exercise for the difference between the shares' fair value and the pre-established price of $16 on 3,700 SA

> On January 1, 2020, Blaine Corporation granted 6,000 options to executives. Each option entitles the holder to purchase one share of Blaine's common shares at $35 per share at any time after January 1, 2022. The shares' market price is $50 per share on t

> Hanover Corporation has 750,000 shares outstanding. The shares have an average cost of $45 per share. On September 5, 2020, the company repurchases 1,500 of its own shares at $75 per share and does not cancel them. The shares are classified as treasury s

> Bedard Corporation reported net income of $300,000 in 2020 and had 200,000 common shares outstanding throughout the year. Also outstanding all year were 45,000 (written) options to purchase common shares at $10 per share. The average market price for the

> Roley Corporation, a private company following ASPE, uses a periodic inventory system and the gross method of accounting for purchase discounts. On July 1, Roley purchased $60,000 of inventory, terms 2/10, n/30, f.o.b. shipping point. Roley paid freight

> In January 2020, Parker Inc. issued preferred shares that must be redeemed by Parker if the fair value of the company's common shares exceeds $100 per share. At time of issuance of the preferred shares, Parker's common shares had a fair value of $60 per

> Assume the same information as in BE17.17 except that Melanie reported net income of $350,000 in 2020. Calculate Melanie's 2020 diluted earnings per share. Round to the nearest cent. From BE17.17: Melanie Corporation reported net income of $550,000 in 2

> Assume the same information as in BE17.15 except that the 10% bonds are convertible into 10,000 common shares. Calculate Thiessen's 2020 diluted earnings per share. Round to the nearest cent. From BE17.15: Thiessen Corporation earned net income of $300,

> Thiessen Corporation earned net income of $300,000 in 2020 and had 100,000 common shares outstanding throughout the year. Also outstanding all year was $800,000 of 10% bonds that are convertible into 26,000 common shares. Thiessen's tax rate is 25%. Calc

> BCE Inc.'s accounting policy note and its note disclosures relating to the company's pension and other postemployment benefits for the year ended December 31, 2017 are set out in the chapter. Instructions Review the disclosures from BCE's 2017 financi

> Access IAS 34 (Interim Financial Reporting), and the interim financial report for the six-month period ended June 30, 2018, for Nestlé SA from the company's website (www.nestle.com). Instructions a. Identify what specific financial statements, and the

> Milliken Corporation reported net income of $700,000 in 2020 and had 115,000 common shares outstanding throughout the year. Also outstanding all year were 9,500 cumulative preferred shares, with each being convertible into two common shares. The preferre

> Francine Limited was incorporated with share capital consisting of 100,000 common shares. In January 2020, it issued 20,000 mandatorily convertible preferred shares. The terms of the prospectus for the issuance of the preferred shares require the convert

> Describe the three-step process followed in arriving at diluted earnings per share when multiple potentially dilutive financial instruments are present.

> Ethan Corporation had 100,000 common shares outstanding on December 31, 2019. During 2020, the company issued 12,000 shares on March 1, retired 5,000 shares on July 1, issued a 20% stock dividend on October 1, and issued 18,000 shares on December 1. For

> Bantec Corporation had 500,000 common shares outstanding on January 1, 2020. On May 1, Bantec issued 50,000 shares. a. Calculate the weighted average number of shares outstanding for the year ended December 31, 2020, if the 50,000 shares were issued for

> Abourawes Services Inc. issued 1,000 $2 convertible preferred shares at $75 and 5,000 common shares at $25 each in 2019. Each preferred share is convertible into three common shares. On March 15, 2020, preferred shareholders converted 200 preferred share

> Spencer Limited has 50,000 common shares outstanding, with an average issue price per share of $8. On August 1, 2020, the company reacquired and cancelled 600 shares at $40 per share. There was contributed surplus of $0.25 per share at the time of the re

> Higgins Inc. has 52,000 common shares outstanding. The shares have an average cost of $21 per share. On July 1, 2020, Higgins reacquired 800 shares at $56 per share and retired them. Assume no contributed surplus balances exist from previous share repurc

> On January 1, 2020, Wolfgang Ltd. paid $1,000 for the option to buy 5,000 of its common shares for $25 each. The contract stipulates that it may be settled only by exercising the option and buying the shares. How should this be accounted for in the finan

> Refer to BE16.4. Assume the same facts except that the forward contract is a futures contract that trades on the Futures Exchange. Ginseng Inc. was required to deposit $30 with the stockbroker as a margin. Prepare the journal entries to update the books

> Maple Leaf Foods Inc. is a Canadian company that produces food products such as prepared meats, ready-to cook and ready-to-serve meals, and fresh pork and poultry. While most of Maple Leaf Foods' business is conducted in Canada, it also generates revenue

> On January 1, 2020, Ginseng Inc. entered into a forward contract to purchase U.S. $6,000 for $6,336 Canadian in 30 days. On January 15, the fair value of the contract was $40 (reflecting the present value of the future cash flows under the contract). Ass

> On February 1, 2020, Daily Produce Ltd. entered into a purchase commitment contract to buy apples from Farmers Corporation. According to the contract, Daily Produce could settle the contact on a net basis; however, Daily Produce intends to take delivery

> Sullivan Limited issued 2,000 common shares for $79,000. Prepare Sullivan's journal entry if a. the shares have no par value, and b. the shares have a par value of $11 per share.

> Sawgrass Corporation, a public company, reported the following balances at January 1, 2020: During the year ended December 31, 2020, the following summary transactions occurred: a. Prepare a statement of changes in shareholders' equity for the year as

> Lu Corporation has the following account balances at December 31, 2020: Prepare the December 31, 2020 shareholders' equity section of the SFP. Common Shares Subscribed $ 250,000 Common Shares 310,000 Subscriptions Receivable Retained Earnings Contri

> Assume that the bonds in BE14.15 were issued for $644,632 and the effective interest rate was 6%. a. Prepare Quinton Corporation's journal entry for the January 1 issuance. b. Prepare the company's journal entry for the July 1 interest payment. c. Prepar

> On January 1, 2020, Quinton Corporation issued $600,000 of 7% bonds that are due in 10 years. The bonds were issued for $559,229 and pay interest each July 1 and January 1. The company uses the effective interest method. Assume an effective rate of 8%. a

> The City of Fram issued 100 bonds at their face value of $6,000 each plus accrued interest on June 1, 2020. The term of the bonds was January 1, 2020, to January 1, 2026, with interest payable semi-annually each January 1 and July 1 at 6%. Fram uses the

> Assume that the bonds in BE14.11 were issued at 103. Assume also that Grenier Limited follows ASPE and records the amortization using the straight-line method. Prepare the journal entries related to the bonds for a. January 1, b. July 1, and c. Decemb

> Mallard Inc. owns shares of Oakwood Corporation that are classified as Mallard's fair value through net income (FV-NI) investment portfolio and accounted for using the FV-NI model. At December 31, 2019, the securities were carried in Mallard's accounting

> Davida Limited started operations in early 2016. Although it has grown steadily, the company reported accumulated operating losses of $450,000 in its first four years in business. In the most recent year (2020), Davida appears to have turned the corner a

> On January 1, 2020, MacGregor Ltd. issued 1,000 five-year, 10% convertible bonds at par of $1,000, with interest payable each December 31. Each bond is convertible into 100 common shares, and the current fair value of each common share is $6. Similar str

> During 2020, Genoa Limited issued retractable preferred shares. The shares may be presented to the company by the holder for redemption after 2023. Explain how these should be presented in the financial statements under IFRS and ASPE.

> Sophia Incorporated issued a $105,000, five-year, zero-interest-bearing note to Angelica Corp. on January 1, 2020, and received $52,000 cash. Sophia uses the effective interest method. a. Using 1. a financial calculator or 2. Excel function Rate, calcu

> On May 1, 2020, Jadeja Corporation, a publicly listed corporation, issued $200,000 of five-year, 8% bonds, with interest payable semi-annually on November 1 and May 1. The bonds were issued to yield a market interest rate of 6%. Jadeja uses the effective

> Samwall Ltd. needed funding to bridge the gap between paying its suppliers and collecting its receivables. As such, Samwall issued a $300,000, four-year, 8% note at face value to Easy Loan Bank on January 1, 2020, and received $300,000 cash. The note req

> Refer to the information for Roley Corporation, a private company following ASPE, in BE13.2. Assume instead that Roley uses a perpetual inventory system. Prepare all necessary journal entries for Roley. From BE 13.2: Roley Corporation, a private company

> Ambrosia Limited has the following balances as at December 31, 2020: accounts payable and accrued liabilities $20,000, wages payable $15,000, bonus payable (due September 30, 2022) $15,000, and bonds payable of $140,000 due September 30, 2023 (current po

> At December 31, 2020, Jelena Incorporated has a bond payable due September 1, 2021, with a carrying value of $1,200,000 (based on amortized cost) and a current value of $1,250,000. The interest payable as at December 31, 2020, is $25,000. Show how the ab

> Use the information for Hanover Corporation in BE15.21. Assume now that the company resells the 1,000 treasury shares at $55 per share. Prepare the journal entries for the repurchase and subsequent sale of the treasury shares. From BE15.21: Hanover Corp

> Khalid Inc. has the following selected financial data: There were no preferred dividends in arrears. a. Calculate the following ratios for 2020: 1. rate of return on common shareholders' equity, 2. payout ratio, 3. price earnings ratio, 4. book val

> BCE Inc., a well-known Canadian telecommunications and media company, has a December 31 year end. Access the company's 2017 annual report from the company website or from www.sedar.com. Instructions a. What per share information has the company provid

> Martinez Ltd. has the following equity accounts at January 1, 2020. a. What was the average issue price of the preferred shares? b. Of the common shares? c. If the preferred shares pay a dividend of $1 per share and are participating, what is the per

> Watson Corporation issued $500,000 of 8%, 10-year bonds on January 1, 2020, at face value. The bonds require annual interest payments each December 31. Costs associated with the bond issuance were $25,000. Watson follows ASPE and uses the straight-line m

> Pflug Ltd. signed an instalment note on January 1, 2020, in settlement of an account payable of $40,000 owed to Mott Ltd. Pflug is able to borrow funds from its bank at 11%, whereas Mott can borrow at the rate of 10%. The note calls for two equal payment

> Big Country Corporation is in the business of selling cattle. Due to recent diseases plaguing cattle, Big Country is experiencing a cash shortage. Big Country issued a $280,000, six-year, zero-interest-bearing note to Little Town Corp. on January 1, 2020

> Brestovacki Corporation issued a $50,000, five-year, 5% note to Jernigan Corp. on January 1, 2020, and received a piece of equipment that normally sells for $38,912. The note requires annual interest payments each December 31. The market interest rate fo

> On January 1, 2020, Steinem Corporation established a special purpose entity to buy $1 million of accounts receivable from Steinem. Investors have invested in the special purpose entity to benefit from the return on assets and certain tax advantages. The

> Lawrence Incorporated owes $100,000 to Ontario Bank Inc. on a two-year, 10% note due on December 31, 2020. The note was issued at par. Because Lawrence is in financial trouble, Ontario Bank agrees to extend the maturity date of the note to December 31, 2

> Lu Corp. erected and placed into service an offshore oil platform on January 1, 2020 at a cost of $10 million. Lu is legally required to dismantle and remove the platform at the end of its nine-year useful life. Lu estimates that it will cost $1 million

> On January 1, 2020, Jamil Incorporated redeemed bonds prior to their maturity date of January 1, 2021. The face value of the bonds was $800,000, and the redemption was performed at 97. As at the redemption date, the unamortized premium was $6,500. Prepar

> Hanson Incorporated issued $1 million of 7%, 10-year bonds on July 1, 2019, at face value. Interest is payable each December 31. The company has chosen to apply the fair value option in accounting for the bonds. A risk assessment at December 31, 2020, sh

> IFRS allows per share amounts to be reported on items other than earnings. Instructions a. Adopt the role of the ethical accountant and write a short essay on the pros and cons of allowing companies to include alternative per share amounts in their an

> Travel In Style Limited issued $1,000,000 of 9% bonds on September 1, 2020, for $1,058,671. The term of the bonds is September 1, 2020, to September 1, 2028, with interest payable quarterly each December 1, March 1, June 1, and September 1. The company u

> Assume that the bonds in BE14.11 were issued at 98. Assume also that Grenier Limited follows ASPE and records the amortization using the straight-line method. Prepare the journal entries related to the bonds for a. January 1, b. July 1, and c. Decembe

> Grenier Limited issued $300,000 of 10% bonds on January 1, 2020. The bonds are due on January 1, 2025, with interest payable each July 1 and January 1. The bonds are issued at face value. Grenier uses the effective interest method. Prepare the company's