Question: On January 1, 2017, Twist Corp. had

> The financial statements of BCE Inc. reported net sales of $21,042 million for its year ended December 31, 2014, and $20,400 million for its year ended December 31, 2013. Accounts receivable (net) were $2,999 million at December 31, 2014, $2,995 million

> In December 2014, the IASB issued an Exposure Draft (ED) called Disclosure Initiative: Proposed Amendments to IAS 7 concerning potential improvements to the statement of cash flows. The first proposed recommendation’s purpose is to improve the informatio

> On July 10, 2017, Amodt Music sold CDs to retailers on account for a selling price of $700,000 (cost $560,000). Amodt grants the right to return CDs that do not sell in three months following delivery. Past experience indicates that the normal return rat

> Explain the rights and obligations created in the following transactions. (a) A manufacturer sells goods with terms f.o.b. shipping point. (b) A manufacturer sells goods with terms f.o.b. destination point. (c) A manufacturer sells goods with terms f.o.b

> On August 15, 2017, Japan Ideas consigned 500 electronic play systems, costing $100 each, to YoYo Toys Company. The cost of shipping the play systems amounted to $1,250 and was paid by Japan Ideas. On December 31, 2017, an account sales summary was recei

> On October 1, 2017, Alpha Inc. assigns $3 million of its accounts receivable to Alberta Provincial Bank as collateral for a $2.6-million loan evidenced by a note. The bank’s charges are as follows: a finance charge of 4% of the assigned receivables and a

> Use the information for Aitocs Inc. in BE7-15 and assume instead that Aitocs follows ASPE. Prepare the entries to record (a) the sale of Aitocs’ equipment and receipt of the note, (b) the recognition of interest each year if Aitocs uses the straight-line

> Lin Du Corp. lent $30,053 to Prefax Ltd., accepting Prefax’s $40,000, three-year, zero-interest-bearing note. The implied interest is 10%. (a) Prepare Lin Du’s journal entries for the initial transaction, recognition of interest each year assuming use of

> Emil Family Importers sold goods to Acme Decorators for $20,000 on November 1, 2017, accepting Acme’s $20,000, six-month, 6% note. (a) Prepare Emil’s November 1 entry, December 31 annual adjusting entry, and May 1 entry for the collection of the note and

> Use the information for Battle Tank Limited in BE7-10 and assume instead that the unadjusted balance in Allowance for Doubtful Accounts is a debit balance of $3,000. Based on this, prepare the December 31, 2017 journal entry to record the adjustment to A

> Battle Tank Limited had net sales in 2017 of $2.3 million. At December 31, 2017, before adjusting entries, the balances in selected accounts were as follows: Accounts Receivable $350,000 debit; Allowance for Doubtful Accounts $4,600 credit. Assuming Batt

> Pine Corporation’s adjusted trial balance contained the following asset accounts at December 31, 2017: Prepaid Rent $22,000; Goodwill $50,000; Franchise Fees Receivable $2,000; Intangible Assets—Franchises $47,000; Intangible Assets—Patents $33,000; and

> Coca-Cola Company and PepsiCo are two of the best known companies worldwide. Their 2014 financial statements can be found in the investor information sections of their company websites: www.coca-colacompany.com/investor and http:// origin-www.pepsico.com

> Lowell Corp.’s December 31, 2017 trial balance includes the following accounts: Inventory $120,000; Buildings $207,000; Accumulated Depreciation—Equipment $19,000; Equipment $190,000; Land Held for Speculation $46,000; Accumulated Depreciation—Buildings

> Ellicott Construction enters into a contract to design and build a hospital. Ellicott is responsible for the overall management of the project and identifies various goods and services to be provided, including engineering, site clearance, foundation, pr

> Kahnert Corporation’s adjusted trial balance contained the following asset accounts at December 31, 2017: Cash $3,000; Treasury Bills (with original maturity of three months) $4,000; Land $60,000; Intangible Assets—Patents $12,500; Accounts Receivable $9

> One of the weaknesses or limitations of the statement of financial position is that it leaves out financial statement elements if they cannot be objectively recorded. Name three examples of items that are omitted because of this limitation.

> Kilarny Company is considering investing in an annuity contract that will return $25,000 at the end of each year for 15 years. What amount should Kilarny Company pay for this investment if it earns a 6% return? Show calculations using three methods (tabl

> If Kerry Dahl invests $3,152 now, she will receive $10,000 at the end of 15 years. What annual rate of interest will Kerry earn on her investment? Round your answer to the nearest whole number. Show calculations using three methods (tables, financial cal

> Smolinski Company is considering an investment that will return a lump sum of $500,000 five years from now. What amount should Smolinski Company pay for this investment in order to earn a 4% return? Show calculations using all four methods (formulas, tab

> In 2017, Renato Corp. had cash receipts from customers of $152,000 and cash payments for operating expenses of $97,000. At January 1, 2017, accounts receivable were $13,000 and total prepaid expenses were $17,500. At December 31, 2017, accounts receivabl

> What is the earnings process under ASPE for each of the following scenarios? (a) A manufacturer makes and sells farm equipment. The customer picks up the equipment upon purchase. In addition, there is a one-year warranty that will be honoured by another

> Miller Ltd. engaged in the following cash transactions during 2017: Sale of land and building………………………………………..$176,000 Repurchase of company’s own shares……………….………..25,000 Purchase of land………………………………………….…………….44,000 Payment of cash dividend……………………………

> Access the financial statements of The Procter & Gamble Company for its year ended June 30, 2014, from the company’s website (www.pginvestor. com). Instructions: Refer to P&G’s financial statements and the accompanying notes to answer the following ques

> The Big and Rich Corporation had income from operations before tax for 2017 of $4.4 million. In addition, it suffered an unusual and infrequent loss of $1,060,000 from a tornado. Of this amount, $300,000 was insured. In addition, the company realized a l

> Mauer Company follows IFRS and licenses consumer-relationship software to Hedges Inc. for three years. In addition to providing the software, Mauer promises to provide consulting services over the life of the licence to maintain operability within Hedges

> Agnu Inc. shows on its statement of financial position its investments accounted for as FV-OCI investments. At its year end of May 31, 2015, the balance in the FV-OCI Investments account was $96,000 and at its year end of May 31, 2016, the balance was $1

> Mega Inc.’s manufacturing division lost $100,000 (net of tax) for the year ended December 31, 2017, and Mega estimates that it can sell the division at a loss of $200,000 (net of tax). The division qualifies for treatment as a discontinued operation. (a)

> Southern Corporation’s adjusted trial balance contained the following accounts at December 31, 2017: Retained Earnings $120,000; Common Shares $700,000; Bonds Payable $100,000; Contributed Surplus $200,000; Preferred Shares $50,000; Goodwill $55,000; and

> Wong Corporation is a popular clothing retailer with 15 stores located across Canada. After fi ve consecutive years of increasing sales, Wong would like to expand operations by adding 10 stores within the next three years. To help fund the expansion, Won

> Use the information presented in BE5-8 for Cellin Limited to prepare the non-current liabilities section of the statement of financial position in accordance with (a) IFRS and (b) ASPE. Data from BE5-8: Included in Cellin Limited’s December 31, 2017 tr

> Included in Cellin Limited’s December 31, 2017 trial balance are the following accounts: Accounts Payable $251,000; Obligations under Lease $175,000; Unearned Revenue $141,000; Bonds Payable $480,000 (due Oct. 31, 2029); Salaries and Wages Payable $127,0

> The following accounts are in Tan Limited’s December 31, 2017 trial balance: Prepaid Rent $1,600; Fair Value—OCI Investments $62,000; Unearned Revenue $7,000; Land Held for Speculation $119,000; and Goodwill $45,000. Prepare the long-term investments sec

> Hung-Chao Yu Company issues a six-year, 8% mortgage note on January 1, 2017, to obtain financing for new equipment. The terms provide for semi-annual installment payments of $112,825. What were the cash proceeds received from the issue of the note? Show

> Airbus Group NV, previously known as European Aeronautic Defence and Space Company or EADS NV, is incorporated in the Netherlands and its shares are traded in France, Germany, and Spain. Access the financial statements of Airbus Group NV for its year end

> Caledonian Company receives a six-year, $50,000 note that bears interest at 8% (paid annually) from a customer at a time when the market interest rate is 6%. What is the present value of the note received by Caledonian? Show calculations using three meth

> Assume the same information as BE3-27, except that the market interest rate is 6% instead of 5%. In this case, how much can Cross Country expect to receive from the sale of these bonds? Show calculations using three methods (tables, financial calculator,

> Cross Country Railroad Co. is about to issue $100,000 of 10-year bonds that pay a 5.5% annual interest rate, with interest payable semi-annually. The market interest rate is 5%. How much can Cross Country expect to receive for the sale of these bonds? Sh

> For each of the following cases, indicate in the chart below the appropriate discount rate (i) and the appropriate number of periods (n) to be used in present value calculations. Show calculations. The first one has been completed as an example. Ann

> Melbourne Inc. reported a current ratio of 1.5:1 in the current year, which is higher than last year’s current ratio of 1.3:1. It also reported an acid-test ratio of 1:1, which is higher than last year’s acid-test ratio of 0.6:1. Is Melbourne’s liquidity

> Gator Printers Inc. is an on-line retailer of printing services, reaching thousands of customers across North America every year. The company was founded 15 years ago as a university campus copy shop and has reported consistent year-over-year sales growt

> Midwest Co. reported the following items in the most recent year: Net income……………………………………………………$40,000 Dividends paid…………………………………………………..5,000 Increase in accounts receivable…………………………10,000 Increase in accounts payable……………………………….7,000 Purchase of e

> Use the information from BE5-16 for Miller Ltd. Determine Miller’s free cash flow, assuming that it reported net cash provided by operating activities of $400,000. Data from BE5-16: Miller Ltd. engaged in the following cash transactions during 2017: S

> Use the information from BE5-16 for Miller Ltd. (a) Calculate the net cash provided (used) by financing activities, under ASPE. (b) Explain how your answer to part (a) would be different if Miller prepares financial statements in accordance with IFRS, if

> Healey Corporation’s statement of financial position as at December 31, 2017, showed the following amounts: Cash $100; Accounts Receivable $600; Land $1,000; Accounts Payable $300; Bonds Payable $500; Common Shares $400; and Retained Earnings $500. Heale

> Access the financial statements of both BCE Inc. and TELUS Corporation for their years ended December 31, 2014, from either the companies’ websites or SEDAR (www.sedar. com). Instructions: Using the financial statements for BCE Inc. and TELUS, answer th

> Kolber Manufacturing Limited designs, manufactures, and distributes safety boots. In January 2017, Kolber purchased another business that manufactures and distributes safety shoes, to complement its existing business. The total purchase price was $10 mil

> Billy’s Burgers (BB) is a franchisor that operates several corporate-owned restaurants as well as several franchised restaurants. The franchisees pay 3% of their sales revenues to BB in return for advertising and support. During the year, BB sold its cor

> Delray Inc. follows IFRS and has the following amounts for the year ended December 31, 2017: gain on sale of FV-NI investments (before tax), $15,000; loss from operation of discontinued division (net of tax), $42,000; income from operations (before tax),

> Cyan Corporation is a manufacturer of paints and specialty coatings. In March 2017, Beck Inc. fi led a lawsuit against Cyan Corporation for alleged patent infringement, claiming $1.1 million in damages. Cyan’s lawyer disputed the claim, but in December 2

> Store-it-Here owns a warehouse. On September 1, it rented storage space to a lessee (tenant) for six months for a total cash payment of $12,000 received in advance. Prepare two sets of journal entries for Store-it-Here, with each set of journal entries r

> Several of Kimper Corporation’s major customers experienced cash flow problems in 2017, mainly due to their increasing labour and production costs in 2016 and 2017. As a result, Kimper’s accounts receivable turnover ratio (net sales revenue/average trade

> What is the purpose of a financial audit?

> In 2017, I & T Corporation reported net income of $8.6 million, and declared and paid preferred share dividends of $3.2 million. During 2017, I & T had a weighted average of 900,000 common shares outstanding. Calculate I & T’s 2017 earnings per share.

> Obtain the auditor’s reports for TELUS Corporation. Identify and read the opinion paragraph. Explain why it is important for auditors to understand the business model and business environment (including the nature of the industry) before they can render

> Neon Limited had 40,000 common shares on January 1, 2017. On April 1, 8,000 shares were repurchased. On August 31, 12,000 shares were issued. Calculate the number of shares outstanding at December 31, 2017, and the weighted average number of shares for 2

> Brookfield Asset Management’s financial statements can be found at the end of this book Instructions: Refer to the company’s financial statements and accompanying notes to answer these questions. (a) What business is Brookfield Asset Management in? (b)

> Use the information in BE4-17 to prepare a statement of retained earnings for Global Corporation, assuming that in 2017, Global discovered that it had overstated 2014 depreciation by $40,000 (net of tax). Data from BE4-17: Global Corporation prepares f

> Global Corporation prepares financial statements in accordance with ASPE. At January 1, 2017, the company had retained earnings of $1,038,000. In 2017, net income was $335,000, and cash dividends of $70,000 were declared and paid. Prepare a 2017 statemen

> Parfait Limited reports the following for 2017: sales revenue, $900,000; cost of sales, $750,000; operating expenses, $100,000; and unrealized gain on FV-OCI investments, $60,000. The company had January 1, 2017 balances as follows: common shares, $600,0

> The Blue Collar Corporation had income from continuing operations of $12.6 million in 2017. During 2017, it disposed of its restaurant division at an after-tax loss of $89,000. Before the disposal, the division operated at a loss of $315,000 (net of tax)

> Use the information in BE4-12 to prepare a multiple-step income statement for Sierra Corporation, showing expenses by function. Data from BE4-12: Sierra Corporation had net sales revenue of $5,850,000 and investment revenue of $227,000 for the year end

> Sierra Corporation had net sales revenue of $5,850,000 and investment revenue of $227,000 for the year ended December 31, 2017. Other items pertaining to 2017 were as follows: Sierra has 100,000 common shares outstanding throughout the year. Prepare a

> Argon Noble Limited has approved a formal plan to sell its head office tower to an outside party. A detailed plan has been approved by the board of directors. The building is on the books at $50 million (net book value). The estimated selling price is $4

> Sunmart Inc. is a discount retailer with 1,000 stores located across North America. Sunmart purchases bulk quantities of groceries and household goods, and then sells the goods directly to retail customers at a markup. Pharmedical Inc. is a pharmaceutica

> What are the major objectives of financial reporting?

> Pelican Inc. made a December 31 adjusting entry to debit Salaries and Wages Expense and credit Salaries and Wages Payable for $2,700. On January 2, Pelican paid the weekly payroll of $5,000. Prepare Pelican’s (a) January 1 reversing entry, (b) January 2

> The financial statements of Quebecor Inc. and Thomson Reuters Corporation for their fi scal years ended December 31, 2014, can be found on SEDAR (www.sedar.com) or the companies’ websites. Instructions: (a) What business is Quebecor Inc. in? Is Thomson

> Jerry Holiday is the maintenance supervisor for Ray’s Insurance Co. and has recently purchased a riding lawn mower and accessories that will be used in caring for the grounds around corporate headquarters. He sent the following informat

> Included in Carville Corp.’s December 31, 2017 trial balance is a note payable of $20,000. The note is an eight-month, 12% note dated October 1, 2017. Prepare Carville’s December 31, 2017 adjusting entry to record the accrued interest, and June 1, 2018 j

> On August 1, Secret Sauce Technologies Inc. paid $12,600 in advance for two years’ membership in a global technology association. Prepare two sets of journal entries for Secret Sauce, with each set of journal entries recording the August 1 journal entry

> Presented below are four different transactions related to materiality. Explain whether you would classify these transactions as material. (a) Blair Inc. has reported a positive trend in earnings over the last three years. In the current year, it reduces

> Determine the amount of interest that will be earned on each of the following investments: (n) () Interest Rate Number of Type of Interest Simple Simple Compound Investment Periods (a) (b) (c) $100 $500 $500 5% 6% 6% 122

> Medici Patriarchs purchased the following investments during 2017: (a) 1,000 shares of Private Limited, a start-up company. The value of this investment was based on an internally developed model. (b) 5,000 shares of CIBC, a public company listed on the

> Identify which specific qualitative characteristic of accounting information is best described in each item below. (a) The annual financial reports of Treelivingo Corp. are audited by public accountants. (b) Able Corp. and Mona, Inc., both use the straig

> Assume that you are following IFRS 13 and measuring the fair value of a building. The building is currently being rented out. Under IFRS 13, the entity must determine the following: (a) how the item could be/is used (b) the market and (c) the valuation t

> Alpha Company signs a contract to sell the use of its patented manufacturing technology to Delta Corp for 15 years. The contract for this transaction stipulates that Delta Corp pays Alpha $18,000 at the end of each year for the use of this technology. Us

> Chang Company must perform an impairment test on its equipment. The equipment will produce the following cash flows: Year 1, $35,000; Year 2, $45,000; Year 3, $55,000. The discount rate is 10%. What is the value in use for this equipment?

> Obtain the 2001 and 2014 annual reports of Goldcorp Inc. from SEDAR (www.sedar.com). Read the annual report material leading up to the financial statement section and answer the following questions: (a) Explain how the company’s business changed in the t

> For each item that follows, identify the foundational principle of accounting that best describes it. (a) For its annual reports, Sumsong Corp. divides its economic activities into 12-month periods. (b) Sullivan, Inc., does not adjust amounts in its fina

> Assume that Enter Inc. just issued a $1,000, 10-year bond bearing annual interest of 4%. The company would like to determine the amount that should be recognized on the financial statements. The bond carries a fixed interest rate of 4% (interest is payab

> When using the discounted cash flow model, there are two approaches that are generally accepted. List these two approaches and explain when each might be used to measure a financial statement element.

> Present value concepts are often used for measurement in financial reporting. List five situations where present value techniques are used to measure assets and explain how. List five situations where present value techniques are used to measure liabilit

> In the chapter, there are two common types of valuation techniques noted. Explain the differences between these two models. Note when each of these techniques might be used in measuring financial statement elements.

> Below are some financial statement elements and their basis of measurement for a public company that follows IFRS. Complete the third column by noting whether the basis of measurement is a cost-based measure, a current value measure, or a hybrid measure.

> Tiger Inc. has the following year-end account balances: Sales Revenue $928,900; Interest Income $17,500; Cost of Goods Sold $406,200; Operating Expenses $129,000; Income Tax Expense $55,100; and Dividends $15,900. Prepare the year-end closing entries.

> Assets are the cornerstone of financial reporting; often it is unclear whether an expenditure is an asset or an expense. For each of the transactions described below, consider whether the expenditure should be recorded as an asset or as an expense. Be su

> What is the likely limitation on “general-purpose financial statements”?

> What is the value of having a common set of standards in financial accounting and reporting?

> The audited annual financial statements of Maple Leaf Foods Inc. for the year ended December 31, 2014, can be found on the company’s website or from SEDAR (www.sedar.com). Instructions: (a) Calculate the liquidity and coverage (solvency) ratios identifi

> Discuss whether the following items would meet the definition of an asset using the IFRS definitions currently in place. If so, explain with reference to the appropriate criteria. (a) MBI Ltd. owns a corporate fleet of cars for senior management’s use in

> How are financial accountants pressured when they need to make ethical decisions in their work? Is having technical mastery of GAAP enough to practice financial accounting?

> Some foreign countries have reporting standards that are different from standards in Canada. What are some of the main reasons why reporting standards are often different among countries?

> If the market rate of interest in BE3-34 were 10%, would you choose the same option? Data from BE3-34: As CFO of a small manufacturing firm, you have been asked to determine the best financing for the purchase of a new piece of equipment. If the vendor

> As CFO of a small manufacturing firm, you have been asked to determine the best financing for the purchase of a new piece of equipment. If the vendor is offering repayment options of $10,000 per year for five years, or no payment for two years followed b

> Assume the same information as in BE3-32, except that you can afford to make annual payments of only $6,000. If you decide to trade in your current car to help reduce the amount of financing required, what trade-in value would you need to negotiate to en

> You would like to purchase a car with a list price of $30,000, and the dealer offers financing over a five-year period at 8%. If repayments are to be made annually, what would your annual payments be? Show calculations using three methods (tables, financ

> You are told that a note has repayment terms of $4,000 per year for fi ve years, with a stated interest rate of 4%. How much of the total payment is for principal, and how much is for interest? Show calculations using two methods (financial calculator an

> During 2017, Darwin Corporation started a construction job with a contract price of $4.2 million. Darwin ran into severe technical difficulties during construction but managed to complete the job in 2019. The contract is non-cancellable. Under the terms

> Guillen Inc. began work on a $7,000,000 non-cancellable contract in 2017 to construct an office building. Guillen uses the completed-contract method under ASPE. At December 31, 2017, the balances in certain accounts were Contract Asset $1,715,000; Accoun