Question: On January 1, 2020, Steinem Corporation established

> 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

> Melanie Corporation reported net income of $550,000 in 2020 and had 900,000 common shares outstanding throughout the year. On May 1, 2020, Melanie issued 5% convertible bonds. Each $1,000 bond is convertible into 120 common shares. Total proceeds at par

> 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

> 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

> Takemoto Inc. borrowed $60,000 on November 1, 2020, by signing a $61,350, three-month, zero-interest-bearing note. a. Using a financial calculator or Excel, calculate the effective interest charged on the note. b. Prepare Takemoto's November 1, 2020 en

> Refer to the information for Upland Limited in BE13.4. Assume that Upland uses reversing entries. Prepare the 2021 journal entry(ies) for Upland. From BE13.4: Upland Limited borrowed $40,000 on November 1, 2020, by signing a $40,000, three-month, 9% not

> Upland Limited borrowed $40,000 on November 1, 2020, by signing a $40,000, three-month, 9% note. Prepare Upland's November 1, 2020 entry; the December 31, 2020 annual adjusting entry; and the February 1, 2021 entry. Round amounts to the nearest dollar.

> Jupiter Corp. provides at no extra charge a two-year warranty with one of its products, which was first sold in 2020. In that year, Jupiter sold products for $2.5 million and spent $68,000 servicing warranty claims. At year end, Jupiter estimates that an

> Sport Pro Magazine sold 12,000 annual subscriptions on August 1, 2020, for $18 each. Prepare Sport Pro's August 1, 2020 journal entry and the December 31, 2020 annual adjusting entry, assuming the magazines are published and delivered monthly.

> Refer to the information for Lu Corp. in BE13.20 and BE13.21. Assume that the increase in the asset retirement obligation in 2020 related to the production of oil in 2020 was $61,942. Prepare any necessary entries to record the increase in the asset reti

> Refer to the information for Lu Corp. in BE13.20. Prepare any necessary adjusting entries that are associated with the asset retirement obligation and related expenses at December 31, 2020, assuming that Lu follows a. IFRS, and b. ASPE. Ignore product

> Molson Coors Brewing Company has a December 31-year end. Access the company's 2017 annual report from the company website (www.molsoncoors.com). Instructions a. What types of earnings per share information does the company provide? b. Does the compan

> Primeau Inc. pays its officers bonuses based on income. For 2020, the bonuses total $350,000 and are paid on February 15, 2021. Prepare Primeau's December 31, 2020 adjusting entry and the February 15, 2021 entry. For the payment entry, ignore withholding

> Laurin Corporation offers parental benefits to its staff as a top-up on EI benefits so that employees end up receiving 100% of their salary for a maximum of 12 months of parental leave. Ruzbeh Awad, who earns $74,000 per year, announced that he will be t

> At December 31, 2020, 30 employees of Kasten Inc. have each earned one week of vacation time. The employees' average salary is $1,000 per week. Prepare Kasten's December 31, 2020 adjusting entry.

> Refer to the information for Whirled Inc. in BE13.15. Assume now that the employer is required to match every dollar of the CPP contributions of its employees and to contribute 1.4 times the EI withholdings. a. Prepare the journal entry to record Whirle

> Whirled Inc.'s weekly payroll of $23,000 included employee income taxes withheld of $3,426, Canada Pension Plan (CPP) withheld of $990, and Employment Insurance (EI) withheld of $420. Prepare the journal entry to record Whirled's weekly payroll.

> At December 31, 2020, Burr Corporation owes $500,000 on a note payable due February 15, 2021. Assume that Burr follows IFRS and that the financial statements are completed and released on February 20, 2021. a. If Burr refinances the obligation by issuin

> At December 31, 2020, Parew Corporation has a long-term debt of $700,000 owing to its bank. The existing debt agreement imposes several covenants related to Parew's liquidity and solvency. At December 31, 2020, Parew was not in compliance with the covena

> Refer to the information about Clausius Ltd. in BE13.11. Assume instead that the tax return indicated 2020 income tax of $10,200. a. Prepare the adjusting year-end entry to recognize the 2020 income tax. b. Identify any year-end SFP amount that is rela

> Yuen Corporation shows the following financial position and results for the three years ended December 31, 2020, 2021, and 2022 (in thousands): For each year, calculate the current ratio, quick ratio, and for 2021 and 2022, calculate the days payables

> Clausius Ltd. made four quarterly payments of $3,200 each to the Receiver General for Canada during 2020 as instalment payments on its estimated 2020 corporate tax liability. At year end, Clausius's controller completed the company's 2020 tax return, whi

> Sky plc, formerly British Sky Broadcasting Group plc, is a pan-European pay television giant and multimedia content company whose common shares trade on the London Stock Exchange. The company produces financial statements in accordance with IFRS. Access

> At December 31, 2020, Lawton & Border Inc. (L&B) is involved in a lawsuit. Under existing standards in IAS 37, a. prepare the December 31 entry assuming it is probable (and very likely) that L&B will be liable for $700,000 as a result of this suit. b.

> Wynn Corp. offers a set of building blocks to customers who send in three codes from Wynn cereal, along with $1. Wynn purchased 100,000 building block sets in 2020 for $2.50 each, and paid for them by cash. During 2020, Wynn sold one million boxes of cer

> On July 10, 2020, Nguyen Ltd. sold $1.7 million worth of compressors to retailers on account. Nguyen had paid $960,000 for these compressors. Nguyen grants the right to return compressors that do not sell in three months following delivery. Past experien

> Henry Corporation sells home entertainment systems. The corporation also offers to sell its customers a two-year warranty contract as a separate service. During 2020, Henry sold 20,000 warranty contracts at $99 each. The corporation spent $180,000 servic

> Refer to the information for Jupiter Corp. in BE13.25. a. Prepare entries for the warranty that recognize the sale as a multiple deliverable with the warranty as a separate service that Jupiter bundled with the selling price of the product. Ignore any c

> Yuen Corporation shows the following financial position and results for the three years ended December 31, 2022, 2021, and 2020 (in thousands): Calculate the current ratio, quick ratio for each year, and the days payables outstanding ratio for 2021 and

> Referring to the research study mentioned in this chapter (in the section “Limitations of Financial Statement Analysis”), discuss some limitations of the financial statement analysis done in BE23.22. Include in your answer some of the general limitations

> Condensed data from the comparative statement of financial position (SFP) of Legros Inc. follow: a. Using vertical (common-size) analysis, calculate the various SFP categories as a percentage of total assets for Legros Inc. for each of 2018, 2019, and 2

> The income statements of Dwayne Corporation show the following amounts: Using vertical (common-size) analysis, analyze Dwayne Corporation's declining profit before tax. Round answers to zero decimal places. 2020 2019 2018 Net sales $800 $770 $720 Co

> On January 1, 2020, 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

> City Goods Limited (CG) is a sports clothing and equipment retailer that has a chain of 10 stores across Canada. You have just been hired as the new controller for the company. You are currently meeting with the CFO to discuss some accounting-related top

> On January 1, 2020, 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, 2020 journal entries. Round to the nearest dollar. From BE20.16: Regina Corporation, which uses ASPE, manufacture

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

> Tonoma Inc., a company that follows IFRS, is preparing its December 31, 2020 financial statements. The following two events occurred after December 31, 2020: 1. A flood loss of $80,000 occurred on March 1, 2021. 2. A liability, estimated and accrued at

> In 2020, 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 2020. Depreciation expense was $17,000 and unrealized losses on FV-NI investments were $3,000. The following accounts changed as indicated in 2020: Calculate the net cash provided by operating activi

> Lupasco Ltd. had the following 2020 income statement data: In 2020, Lupasco had the following activity in selected accounts: Prepare Lupasco's cash flows from operating activities section of the statement of cash flows using a. the direct method, and

> Kamsky Inc., which follows IFRS, had the following balances and amounts on its comparative financial statements at year end: a. Calculate income taxes paid in 2020 and discuss the related disclosure requirements under IFRS, if any. b. If Kamsky followe

> Ciao Corporation had January 1 and December 31 balances as follows: For 2020, the cost of goods sold was $550,000. Calculate Ciao's 2020 cash paid to suppliers of inventory 1/1/20 12/31/20 Inventory $90,000 $113,000 Accounts payable 61,000 69,000

> At January 1, 2020, Apex Inc., a private company following ASPE, had accounts receivable of $72,000. At December 31, 2020, the accounts receivable balance was $59,000. Sales revenue for 2020 was $420,000. Sales returns and allowances for the year were $1

> Locate and review the statement of changes in shareholders' equity for the Hudson's Bay Company (HBC) in its financial statements for the 53 weeks ended February 3, 2018 (fiscal 2017) and the 52 weeks ended January 28, 2017 (fiscal 2016), at the end of V

> Using the information from BE22.9 for Azure Ltd., (a) prepare the cash flows from operating activities section of Azure's 2020 statement of cash flows using the indirect method and following IFRS. (b) How would the disclosure requirements differ under AS

> Azure Ltd. had the following 2020 income statement data: The following accounts increased during 2020 by the amounts shown: Accounts Receivable, $17,000; Inventory, $11,000; Accounts Payable (relating to inventory), $13,000; Taxes Payable, $2,000; and M