Question: Refer to the data and other information

> The following is the shareholders’ equity section of Suozzi Corp. at December 31, 2017: Instructions: (a) No dividends were paid in 2015 or 2016. On December 31, 2017, Suozzi wants to pay a cash dividend of $4 per share to common shar

> The books of Binkerton Corporation carried the following account balances as at December 1, 2017: The preferred shares have dividends in arrears for the past year (2016). On December 21, 2017, the board of directors declared the following: The current

> McNamara Limited’s ledger shows the following balances on December 31, 2017: Preferred shares outstanding: 25,000 shares……………………………..$ 625,000 Common shares outstanding: 40,000 shares……………………………..3,000,000 Retained earnings………………………………………………………………………890

> The outstanding share capital of Meadowcrest Corporation consists of 3,000 shares of preferred and 7,000 common shares for which $280,000 was received. The preferred shares carry a dividend of $7 per share and have a $100 stated value. Instructions: Ass

> Instructions: Refer to the data and other information provided in E20-1, but now assume that Maleki’s fiscal year end is May 31. Prepare the journal entries on Maleki Corp.’s books to reflect the signing of the lease agreement and to record payments and

> Stankovic Inc. recently hired a new accountant with extensive experience in accounting for partnerships. Because of the pressure of the new job, the accountant was unable to review what he had learned earlier about corporation accounting. During the firs

> As of December 31, 2016, Cayenne Ltd., a public company, has 40,000 common shares outstanding. During 2017, Cayenne had the following transactions. 1. Issued 6,000 common shares at $29 per share, less $2,000 in costs related to the issuance of the shares

> Use the same information as in E14-24 but assume now that Green Bank reduced the principal to $1.6 million rather than $1.9 million. On January 1, 2021, Troubled Inc. pays $1.6 million in cash to Green Bank for the principal. The market rate is currently

> Assume the same information as in E14-24 and answer the following questions related to Green Bank (the creditor). Green Bank prepares financial statements in accordance with IFRS 9. There is no evidence of a significant increase in credit risk and 12-mon

> On December 31, 2017, Green Bank enters into a debt restructuring agreement with Troubled Inc., which is now experiencing financial trouble. The bank agrees to restructure a $2-million, 12% note receivable issued at par by the following modifications: 1.

> Strickland Inc. owes Heartland Bank $200,000 plus $18,000 of accrued interest. The debt is a 10-year, 10% note. During 2017, Strickland’s business declined due to a slowing regional economy. On December 31, 2017, the bank agrees to accept an old machine

> On December 31, 2016, Mohr Inc. borrowed $81,241 from Par Bank, signing a $125,000, five-year, non–interest-bearing note. The note was issued to yield 9% interest. Unfortunately, during 2017 Mohr began to experience financial difficulty. As a result, thi

> Jyoti Inc. had outstanding $10 million of 8% bonds (interest payable March 31 and October 31) due in 12 years. Jyoti was able to reduce its risk rating through investing in more real estate. As a result, on September 1, it issued $5 million of 10-year, 6

> Laurentian Mills Ltd. had the following shareholders’ equity at January 1, 2017. The contributed surplus accounts arose from amounts received in excess of the par value of the shares when issued. During 2017, the following transaction

> The condensed balance sheets of Rockford Limited, a small private company that follows ASPE, follow for the periods immediately before, and one year after, it had completed a financial reorganization: For the year following the financial reorganization

> On September 15, 2017, Local Camping Limited, the lessee, entered into a 20-year lease with Sullivan Corp. to rent a parcel of land at a rate of $30,000 per year. Both Local and Sullivan use ASPE. The annual rental is due in advance each September 15, be

> Callaghan Inc. decided to sell shares to raise additional capital so that it could expand into the rapidly growing service industry. The corporation chose to sell these shares through a subscription basis and publicly notified the investment world. The o

> The following account balances are available from the ledger of Yutao Shui Corporation on December 31, 2016: Common Shares (20,000 shares authorized and outstanding)………………..$1,000,000 Retained Earnings (Deficit)……………………………………………………………………(190,000) On Ja

> What follows are the liabilities and shareholders’ equity sections of the statements of financial position for Kao Corp. and Bennington Corp. Each has assets totaling $4.2 million. For the year, each company has earned the same income

> Brubacher Corporation’s post-closing trial balance at December 31, 2017 was as follows: At December 31, 2017, Brubacher had the following numbers for its common and preferred shares: The dividends on preferred shares are $5 cumulati

> The following are selected transactions that may affect shareholders’ equity. 1. Converted bonds to common shares. 2. Declared a cash dividend. 3. Effected a stock split. 4. Recorded the expiration of insurance coverage that was previou

> Sunshine Incorporated provides solar energy services to Toronto. Sunshine needed to buy additional solar energy panels to meet the demand for its energy product. The government of Ontario offered an interest-free forgivable loan to Sunshine in the amount

> On January 1, 2017, Copeland Ltd. (a public company) had the following shareholders’ equity accounts: Preferred shares, $5 non-cumulative, unlimited number authorized, none issued………….–0– Common shares, unlimited number authorized, 800,000 issued…………………

> Miss M’s Dance Studios Ltd. is a public company, and accordingly uses IFRS for financial reporting. The corporate charter authorizes the issuance of an unlimited number of common shares and 50,000 preferred shares with a $2 dividend. At the beginning of

> Falkon Corp. reported the following amounts in the shareholders’ equity section of its December 31, 2016 statement of financial position: Preferred shares, $8 dividend (10,000 shares authorized, 2,000 shares issued)……….$ 200,000 Common shares (unlimited

> Original Octave Inc. (OOI) is a widely held, publicly traded company that designs equipment for tuning musical instruments. Information about its shareholders’ equity is as follows. The preferred share dividend was not paid in 2016. S

> Presented below are five independent situations. All the companies involved use ASPE unless otherwise noted. 1. On December 31, 2017, Zarle Inc. sold equipment to Orfanakos Corp. and immediately leased it back for 10 years. The equipment’s selling price

> The shareholders’ equity accounts of Abbasi Inc. have the following balances on December 31, 2017: Common shares, 400,000 shares issued and outstanding………………..$10,000,000 Contributed surplus…………………………………………………………………………….300,000 Retained earnings……………………

> Singh Inc., a public company, has been experiencing financial difficulty in the past few years. As a result, the common shares have been trading at a per share price of just over $1. If the stock trades at below $1 in the future, the stock exchange would

> Yang Inc. was organized on January 1, 2017. It is authorized to issue an unlimited number of common shares and 100,000 preferred shares with a $4 dividend. The following share transactions were completed during the first year: Jan. 10 Issued 200,000 comm

> Buon Appetito Limited has been experiencing increased customer demand for its specialty food products. In order to meet this demand, the company has bought additional refrigeration units to hold more inventory. To finance this purchase, Buon Appetito iss

> Desrocher Ltd. issued an instalment note on January 1, 2017 (with a required yield of 9%) in exchange for land that it purchased from Safayeni Ltd. Safayeni’s real estate agent had listed the land on the market for $120,000. The note calls for three equa

> Two independent situations follow. 1. On January 1, 2017, Spartan Inc. bought land that had an assessed value of $390,000 at the time of purchase. A $600,000, non–interest-bearing note due on January 1, 2020 was given in exchange. There was no establishe

> On January 1, 2017, Landlord Corporation acquired the following properties: 1. Land and an apartment building in Toronto for $1.5 million. To finance this transaction, Landlord Corporation issued a five-year interest-free promissory note to repay $2,307,

> Foreman Inc. issued $800,000 of 20-year, 10% bonds on January 1, 2017 at 102. Interest is payable semi-annually on July 1 and January 1. The company uses the straight-line method of amortization for any bond premium or discount. Instructions: (a) Prepar

> Foreman Inc. issued $800,000 of 10%, 20-year bonds on January 1, 2017 at 102. Interest is payable semi-annually on July 1 and January 1. Foreman Inc. uses the effective interest method of amortization for any bond premium or discount. Assume an effective

> Two independent situations follow: 1. On January 1, 2017, Divac Limited issued $300,000 of 10-year, 9% bonds at par. Interest is payable quarterly on April 1, July 1, October 1, and January 1. 2. On June 1, 2017, Verbitsky Inc. issued at par, plus accrue

> On January 1, 2017, Hein Corporation sells equipment to Liquidity Finance Corp. for $720,000 and immediately leases the equipment back. Both Hein and Liquidity use ASPE. Other relevant information is as follows. 1. The equipment’s carrying value on Hein’

> Comparative statement of financial position accounts of Jensen Limited, which follows IFRS, appear below: Data from Jensen’s 2017 income statement follow: Additional information: 1. Equipment that cost $10,000 and was 40% depreciate

> Stellar Corp. had the following shareholders’ equity on January 1, 2017: Common shares, unlimited number authorized, 100,000 shares issued and outstanding………………………………………….…………….………….$ 270,000 Contributed surplus…………………………………………………………………..……….310,000 Ret

> On January 2, 2012, Kowalchuk Corporation, a small company that follows ASPE, issued $1.5 million of 10% bonds at 97 due on December 31, 2021. Legal and other costs of $110,000 were incurred in connection with the issue. Kowalchuk Corporation has a polic

> Anaconda Inc. has issued three types of debt on January 1, 2017, the start of the company’s fiscal year: 1. $10 million, 10-year, 13% unsecured bonds, with interest payable quarterly, priced to yield 12% 2. $2.5 million par of 10-year, zero-coupon bonds

> Refer to E14-18 and Auburn Limited. Instructions: Repeat the instructions of E14-18 assuming that Auburn Limited follows IFRS and uses the effective interest method. Provide an effective-interest table for the bonds from the inception of the bond to the

> On June 30, 2010, Auburn Limited issued 12% bonds with a par value of $800,000 due in 20 years. They were issued at 98 and were callable at 104 at any date after June 30, 2017. Because of lower interest rates and a significant change in the company’s cre

> Friedman Corporation had bonds outstanding with a maturity value of $500,000. On April 30, 2017, when these bonds had an unamortized discount of $10,000, they were called in at 104. To pay for these bonds, Friedman had issued other bonds a month earlier

> On June 30, 2017, Mosca Limited issued $4 million of 20-year, 13% bonds for $4,300,920, which provides a yield of 12%. The company uses the effective interest method to amortize any bond premium or discount. The bonds pay semi-annual interest on June 30

> Four independent situations follow. 1. Wen Corporation incurred the following costs when it issued bonds: printing and engraving costs, $25,000; legal fees, $69,000; and commissions paid to underwriter, $70,000. 2. Griffith Inc. sold $3 million of 10-yea

> Minor Inc. sells 10% bonds having a maturity value of $3 million for $2,783,713. The bonds are dated January 1, 2017 and mature on January 1, 2022. Interest is payable annually on January 1. Instructions: (a) Set up a schedule of interest expense and di

> Cinderella Shoes Inc. is having difficulty meeting its working capital requirements. As a result, on January 1, 2017, the company sold bonds with a face value of $1 million, receiving $800,000 in cash. The bonds have an interest rate of 8% and mature on

> On January 1, 2017, Osborn Inc. sold 12% bonds having a maturity value of $800,000 for $860,652, which provides the bondholders with a 10% yield. The bonds are dated January 1, 2017 and mature on January 1, 2022, with interest payable on January 1 of eac

> Kanish Corporation’s general ledger includes the following account balances: The Contributed Surplus account arose from net excess of proceeds over cost on a previous cancellation of common shares. The average cost of the common share

> Collins Corporation bought a computer on December 31, 2017, paying $30,000 down with a further $75,000 payment due on December 31, 2020. An interest rate of 10% is implicit in the purchase price. Collins uses the effective interest method and has a Decem

> The following examples describe possible features or characteristics of long term debt: 1. The debt agreement includes a covenant that requires the debtor to maintain a minimum amount of working capital. 2. The stated rate of a bond issue is less than th

> On December 31, 2017, Zimmer Corporation has $7.9 million of short term debt in the form of notes payable that will be due periodically in 2018 to Provincial Bank. On January 28, 2018, Zimmer enters into a refinancing agreement with the bank that will pe

> On December 31, 2017, Hornsby Corporation had $1.2 million of short term debt in the form of notes payable due on February 2, 2018. On January 21, 2018, in order to ensure that it had sufficient funds to pay for the short-term debt when it matured, Horns

> The following is a list of possible transactions. 1. Purchased inventory for $80,000 on account. (Assume a perpetual system is used.) 2. Issued an $80,000 note payable in payment of an account (see item 1 above). 3. Recorded accrued interest on the note

> Shaddick Corp., a public company following IFRS, began its 2017 fiscal year with a debit balance of $11,250 in its Income Tax Receivable account. During the year, Shaddick made quarterly income tax instalment payments of $8,100 each. In early June, a che

> Sararas Ltd. is a merchant and operates in the province of Ontario, where the HST rate is 13%. Sararas uses a perpetual inventory system. Transactions for the business for the months of March and April are as follows: Mar. 1 Paid March rent to the landlo

> Diagnostics Corp. follows IFRS and sells its products in expensive, reusable containers that can be tracked. The customer is charged a deposit for each container that is delivered and receives a refund for each container that is returned within two years

> On September 1, 2017, Wong Corporation, which uses ASPE, signed a five-year, non-cancellable lease for a piece of equipment. The terms of the lease called for Wong to make annual payments of $13,668 at the beginning of each lease year, starting September

> Harold Limited’s condensed financial statements provide the following information: Instructions: (a) Determine the following: 1. Current ratio at December 31, 2017 2. Acid-test ratio at December 31, 2017 3. Accounts receivable turnov

> Kawani Corporation has been operating for several years. On December 31, 2017, it presented the following statement of financial position. Cost of goods sold in 2017 was $420,000, operating expenses were $51,000, and net income was $27,000. Accounts pa

> Henrietta Aguirre, the ethical accountant, is the newly hired Director of Corporate Taxation for Mesa Incorporated, which is a publicly traded corporation. Aguirre’s first job with Mesa was to review the company’s accounting practices for deferred taxes.

> Locate the 2015 audited annual financial statements of a company that may be experiencing financial difficulties, such as a pharmaceutical company still primarily in the research and development stage. One such company is Antibe Therapeutics Inc., a Cana

> Refer to the information for Darby Corporation in E13-2. Instructions: (a) Prepare the journal entries for the payment of the notes at maturity. (b) Repeat part (a) assuming Darby uses reversing entries. (Show the reversing entries at January 1, 2018.)

> Four independent situations follow. Situation 1: During 2017, Sugarpost Inc. became involved in a tax dispute with the CRA. Sugarpost’s tax lawyers have informed management that Sugarpost will likely lose this dispute. They also believe that Sugarpost wi

> Islim Limited manufactures faux fur coats of all types and sizes that are sold to specialty stores throughout Canada. Sales to retailers provide for payment within 60 days of delivery and the retailer may return a maximum of 25% of an order at the retail

> St. Thomas Auto Repairs is preparing the financial statements for the year ended November 30, 2017. As the accountant, you are looking over the information regarding short-term liabilities, and determining the amounts that should be reported on the balan

> Timo van Leeuwen operates a very busy roadside fruit and vegetable stand from May to October every year as part of his farming operation, which has a December 31 year end and uses ASPE. Each time a customer purchases over $10 of produce, Timo gives the c

> Three independent situations follow. Situation 1: Marquart Stamp Corporation records stamp service revenue and provides for the cost of redemptions in the year stamps are sold to licensees. The stamps can be collected and then redeemed for discounts on f

> Pucci Corporation is a machinery dealer whose shares trades on the TSX, and so uses IFRS 16. Pucci leased a machine to Ernst Ltd. on January 1, 2017. The lease is for a six-year period and requires equal annual payments of $24,736 at the beginning of eac

> Moleski Limited, a private company following ASPE, includes one coupon in each box of soap powder that it produces, and 10 coupons are redeemable for a premium (a kitchen utensil). In 2017, Moleski purchased 8,800 premiums at $0.90 each and sold 120,000

> To increase sales, Bélanger Inc., a public company following IFRS, implemented a customer loyalty program that rewards a customer with 1 loyalty point for every $10 of purchases on a select group of products. Each point is redeemable for a $1 discount on

> Novack Machinery Co. manufactures equipment to a very high standard of quality; however, it must still provide a warranty for each unit sold, and there are instances where the machines do require repair after they have been put into use. Novack started i

> Selzer Equipment Limited sold 500 Rollomatics on account during 2017 for $6,000 each. During 2017, Selzer spent $30,000 servicing the two-year warranties that are included in each sale of the Rollomatic. All servicing transactions were paid in cash. Ins

> The amount of income tax that is due to the government for a period of time is rarely the same as the amount of income tax expense that is reported on the income statement for that same period under IFRS and one of the alternatives under ASPE. Instructi

> Cool Sound Ltd. manufactures a line of amplifiers that carry a three-year warranty against defects. Based on experience, the estimated warranty costs related to dollar sales are as follows: first year after sale—2% of sales; second year

> The following are selected 2017 transactions of Darby Corporation. Sept. 1 Purchased inventory from Orion Ltd. on account for $50,000. Darby uses a periodic inventory system and records purchases using the gross method of accounting for purchase discount

> Cléroux Corporation sold 150 colour laser copiers in 2017 for $4,000 each, including a one-year warranty. Maintenance on each machine during the warranty period averages $300. Instructions: (a) Prepare entries to record the machine sales and the related

> Listed below are selected transactions of Schultz Department Store for the current year ending December 31. 1. On December 5, the store received $500 from the Selig Players as a deposit to be returned after certain furniture to be used in a stage product

> On May 1, 2017, Green Machine Inc. entered into a contract to deliver one of its specialty mowers to Schroeter Landscaping Co. The contract requires Schroeter to pay the contract price of $3,200 in advance on May 15, 2017. Schroeter pays Green Machine on

> On May 1, 2017, a machine was purchased for $1,750,000 by Pomeroy Corp., a private company following ASPE. The machine is expected to have an eight-year life with no salvage value and is to be depreciated on a straight-line basis. The machine was leased

> Crude Oil Limited purchased an oil tanker depot on July 2, 2017 at a cost of $600,000 and expects to operate the depot for 10 years. After the 10 years, Crude Oil is legally required to dismantle the depot and remove the underground storage tanks. It is

> On January 1, 2017, Offshore Corporation erected a drilling platform at a cost of $5,460,000. Offshore is legally required to dismantle and remove the platform at the end of its six-year useful life, at an estimated cost of $950,000. Offshore estimates t

> The incomplete income statement of Justin Corp. follows. The employee profit-sharing plan requires that 20% of all profits remaining after the deduction of the bonus and income tax be distributed to the employees by the first day of the fourth month fo

> Goldwing Corporation offers enriched parental benefits to its staff. While the government provides compensation based on Employment Insurance legislation for a period of 12 months, Goldwing increases the amounts received and extends the period of compens

> Refer to the data in E13-11 and assume instead that Mustafa Limited has chosen not to recognize paid sick leave until it is used, and has chosen to accrue vacation time at expected future rates of pay without discounting. Mustafa uses the following proje

> Sporon Corp. is a fast-growing Canadian private company involved in the manufacturing, distribution, and retail of specially designed yoga and leisure wear. Sporon has recently signed 10 leases for new retail locations and is looking to sign about 30 mor

> Mustafa Limited began operations on January 2, 2016. Mustafa employs nine individuals who work eight-hour days and are paid hourly. Each employee earns 10 paid vacation days and 6 paid sick days annually. Vacation days may be taken after January 15 of th

> As the new accountant for Carly’s Pet Express Inc., a line of pet boutiques, you are developing the financial statement disclosures for the 2017 financial statement note on income taxes. The company uses ASPE, and has selected the taxes payable method. T

> Refer to the information in E18-15 for Zdon Inc. Assume that the company follows the taxes payable method of accounting for income taxes under ASPE. During the year, Zdon Inc. made tax instalment payments of $42,000. Instructions: (a) Calculate the taxa

> Refer to the information in E18-11 for Henry Limited. Assume that the company reports under ASPE and that the taxes payable method of accounting is used for income tax. Instructions: (a) Prepare the journal entries to record income tax at December 31,

> On January 1, 2017, Vick Leasing Inc., a lessor that uses IFRS 16, signed an agreement with Rock River Inc., a lessee, for the use of a compression system. The system cost $415,000 and was purchased from Manufacturing Solutions Ltd. specifically for Rock

> Geoff Corp.’s operations in 2017 had mixed results. One division, Vincenti Group, again failed to earn income at a rate that was high enough to justify its continued operation, and management therefore decided to close the division. Vincenti Group earned

> Darrell Corporation reports under IFRS. At December 31, 2017, the company had a net deferred tax liability of $402,000. An explanation of the items that make up this balance follows: Instructions: (a) Indicate how deferred tax should be presented on Da

> Refer to the information provided about Roux Corp. in E18-28. Instructions: (a) Assuming that it is more likely than not that $25,000 of the deferred tax asset will not be realized, prepare the journal entries to record income taxes for 2017. Roux uses

> Roux Corp. had a Deferred Tax Asset account with a balance of $81,000 at the end of 2016 due to a single temporary difference of $270,000 related to warranty liability accruals. At the end of 2017, this same temporary difference has increased to $300,000

> Refer to the information for Riley Inc. in E18-26. Instructions: (a) Assume that Riley Inc. uses a valuation allowance to account for deferred tax assets, and also that it is more likely than not that 25% of the carryforward benefits will not be realize

> Riley Inc. reports the following pre-tax incomes (losses) for both financial reporting purposes and tax purposes: The tax rates listed were all enacted by the beginning of 2015. Riley reports under the ASPE future/deferred income taxes method. Instruc

> Corby Spirit and Wine Limited is a leading Canadian marketer and distributor of premium spirits and wine brands. Obtain a copy of the company’s comparative financial statements for the year ended June 30, 2015 from the company’s website (www.corby.ca).