Question: The ledger of Rainy Day Umbrella Ltd.

> Prepare the following adjusting entries at December 31 for Karpai Ltd: 1. Interest on notes receivable of $600 is accrued. 2. Fees earned but unbilled total $1,800. 3. Salaries earned of $ 1,200 have not been recorded. 4. Bad debt expense for the year is

> Included in Carville Corp.'s December 31, 2014 trial balance is a note payable of $20,000. The note is an eight-month, 12% note dated October I, 2014. Prepare Carville's December 31, 2014 adjusting entry to record the accrued interest, and June I, 2015 j

> The following transactions for Juan More Taco Inc. (JMT) occurred in the month of May. Prepare journal entries for each transaction. May 1 Owners invest $12,000 cash in exchange for common shares of JMT Inc., a small chain of fast food outlets. 3 Buy

> The trial balance of Jangles Corporation at the end of its fiscal year, August 31, 2014, includes the following accounts: Purchases $ 151,600; Sales Revenue $250,000; Freight in $4,000; Sales Returns and Allowances $4,000; Freight-out $1,000; and Purchas

> Kothari Ltd. made the following transactions: 1. Payment of a S200 invoice on account 2. Increase in the fair value of a Fair Value-Net Income Investment by S250 3. Sale on account for $100 4. Purchase of equipment paid for with $500 cash and a $ 1,000 n

> Moosa Corp. has the following accounts: 1. Accounts Receivable 2. Income Tax Expense 3. Rent Revenue 4. Retained Earnings 5. Bank Loans 6. Unrealized Gain or Loss-OCI 7. Accumulated Other Comprehensive Income For each account, indicate (a) whether a $100

> Plant Inc. uses the following accounts in its trial balance: 1. Sales 2. Investment Loss 3. Dividends 4. Salaries and Wages Payable 5. Fair Value-OCI Investment 6. Cost of Goods Sold 7. Accumulated Other Comprehensive Income 8. Allowance for Doubtful Acc

> Extensible business reporting language (XBRL) is a financial reporting system that allows a company to "tag" each piece of financial information as it is input into the company's books of account. Information is tagged in the database according to a stan

> ABC Commerce Corp.'s weekly payroll totals $20,000 and is paid every two weeks. The final payroll for the year was for the week ended December 24. ABC pays full payroll during the holiday season. The next payroll was paid on January 7. To prepare for yea

> ERP software systems include bookkeeping systems as well as systems to monitor and manage human resource functions, quality control functions, and many other aspects of business. The software runs off a centralized database that services all company depa

> The following accounts appeared in the December 31 trial balance of the Majestic Theatre: Instructions (a) From the account balances above and the information that follows, prepare the annual adjusting entries necessary on December 31: 1. The equipment h

> Second-Hand Almost New Department Store Inc. is located near the shopping mall. At the end of the company's fiscal year on December 31, 2014, the following accounts appeared in two of its trial balances: Analysis reveals the following additional informa

> The trial balance of Slum Dog Fashion Centre Inc. contained the following accounts at November 30, the company's fiscal year end: Adjustment data: 1. Store supplies on hand totalled $3,100. 2. Depreciation is $40,000 on the store equipment and $30,000 on

> Noah's Foods has a fiscal year ending on September 30. Selected data from the September 30 work sheet follow: Instructions (a) Prepare a complete work sheet. (b) Prepare a statement of financial position. (In the next fiscal year, $ 10,000 of the mortgag

> 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 $ 12 9,000; Income Tax Expense $55, I 00; and Dividends $15,900. Prepare the year-end closing entri

> Below are the completed financial statement columns of the work sheet for Canned Heat Limited: Instructions (a) Prepare a statement of comprehensive income, statement of changes in shareholders' equity, and statement of financial position. Canned Heat's

> A review of the ledger of Rolling Resort Inc. at December 31 produces the following data for the preparation of annual adjusting entries: 1. Salaries and Wages Payable, $0. There are eight salaried employees. Five employees receive a salary of $1,200 eac

> Yancy Advertising Agency Limited was founded by Tang Mia in January 2010. Presented below are both the adjusted and unadjusted trial balances as at December 31, 2014: Instructions (a) Joumalize the annual adjusting entries that were made. (b) Prepare a

> Transactions follow for Emily Cain, D.D.S., for the month of September: Instructions (a) Enter the transactions in appropriate ledger accounts, using the following account titles: Cash; Accounts Receivable; Prepaid Rent; Supplies; Equipment; Accumulated

> Samuels Corp. began operations on January 1, 2014. Its fiscal year end is December 31. Samuels has decided that prepaid costs are debited to an asset account when paid, and all revenues are credited to revenue when the cash is received. During 2014, the

> On September I, 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 recording the September 1 journa

> To prepare financial statements for the month of March 2014. Mona accumulated all the ledger balances from the business records and found the following: Mona reviewed the records and found the following errors: 1. Cash received from a customer on account

> The unadjusted trial balance of Imagine Ltd. at December 31,2014, is as follows: Additional information: 1. On November 1, 2014, Imagine received $10,200 rent from its lessee for a 12-month lease beginning on that date. This was credited to Rent Revenue.

> The unadjusted trial balance of Clancy Inc. at December 31, 2014, is as follows: Additional information: 1. Actual advertising costs amounted to$1,500 per month. The company has already paid for advertisements in Montezuma Magazine for the first quarter

> The December 31 trial balance of Red Roses Boutique Inc. follows: Instructions (a) Create T accounts and enter the balances shown. (b) Prepare adjusting entries for the following and post to the T accounts. Open additional T accounts as necessary. (The b

> Willis Corporation has Beginning Inventory $76,000; Purchases $486,000; Freight-in $16,200; Purchase Returns 55,800; Purchase Discounts $5,000; and Ending Inventory $69,500. Calculate Willis's cost of goods sold.

> The trial balance follows of the Masters Golf Club, Inc. as at December 31. The books are closed annually on December 31. Instructions (a) Enter the balances in ledger accounts. Allow five lines for each account. (b) From the trial balance and the inform

> The following information relates to Joachim Anderson, Realtor, at the close of the fiscal year ending December 31: 1. Joachim paid the local newspaper S335 for an advertisement to be run in January of the next year, and charged it to Advertising Expense

> Brook Corporation was founded by Ronnie Brook in January 2003. The adjusted and unadjusted trial balances as at December 31, 2014, follow: Instructions (a) Journalize the annual adjusting entries that were made. (b) Prepare an income statement and state

> The trial balance and the other information for consulting engineers Mustang Rovers Consulting Limited follow: Additional information: 1. Fees received in advance from clients were $6,900. 2. Services performed for clients that were not recorded by Decem

> LD Driving Range Inc. was opened on March 1 by Phil Woods. The following selected events and transactions occurred during March: Woods uses the following accounts for his company: Cash; Prepaid Insurance; Prepaid Rent; Land; Buildings; Equipment; Accoun

> The trial balance of Mis-Match Inc. on June 30, 2014, is as follows: The following transactions took place in July 2014: 1. Payments received from customers on account amounted to $ 1,320. 2. A computer printer was purchased on account for $500. 3. Ser

> On August I, 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 I journal entry

> Below is the April 30 trial balance of Blues Around the Corner Corporation: An examination of the ledger shows these errors: 1. Salaries and Wages Payable include $300 of salaries and wages accrued in April, which are related to employee services provid

> The April 30, 2014 trial balance below of Many Happy Returns Company, a sole proprietorship, does not balance. Your review of the ledger reveals the following: 1. Each account has a normal balance. 2. The debit footings (totals) in Prepaid Insurance, Acc

> Bill Rosenberg recently opened his legal practice. During the first month of operations of his business (a sole proprietorship), the following events and transactions occurred: Instructions Prepare a correct trial balance. April 2 Invested $15,000 c

> 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 information to the account

> Financial information follows for four different companies: Instructions Determine the missing amounts for (a) to (i). Show all calculations. Pamela's Scheibli Berthault Kaiserman Cosmetics Inc. $98,000 Grocery Inc. Supply Ltd. $120,000 9,000 Wholesa

> Financial information follows for two different companies: Instructions Calculate the missing amounts. Bessembinder Ltd. Doberman Inc. $192,000 (a) 162,000 55,500 (b) 35,000 (c) Sales Revenue (d) $16,000 65,000 (e) 37,000 23,000 14,000 Sales Returns

> Selected accounts for Winslow Inc. as at December 31, 2014, are as follows: Instructions Prepare closing entries for Winslow Inc. on December 31, 2014. Inventory FV-NI Investments FV-OCI Investments Retained Earnings Dividends Accumulated Other Comp

> Information follows for Shakira Corporation for the month of January: Instructions Prepare the necessary closing entries. $228,000 62,000 3,200 33,000 9,000 12,000 20,000 $ 61,000 16,000 1,200 7,000 1,000 364,000 14,000 Cost of Goods Sold Salary and

> The adjusted trial balance of Serious Limited shows the following sales data at the end of its fiscal year on October 31, 2014: Sales $1,250,000; Freight-out $18,000; Sales Returns and Allowances $4,000; and Sales Discounts $15,000. Instructions (a) Pr

> The trial balance for Hanna Resort Limited on August 31 is as follows: Additional information: 1. The balance in Prepaid Rent includes payment of the final month's rent and rent for August 2014. 2. An inventory count on August 31 shows $650 of supplies

> Selected accounts of Bang Bang Boom Fireworks Limited follow: Inst ructions From an analysis of the T accounts, reconstruct (a) the August transaction entries, and (b) the adjusting entries that were recorded on August 3 I. Supplies Accounts Receiva

> Using the data in BE3-6, prepare two sets of journal entries for No Claims Insurance, with each set of journal entries recording the July I, 2014 entry and the December 31, 2014 adjusting entry. No Claims uses an Unearned Revenue account and an Insurance

> Alberto Rock is the new owner of Summer Computer Services Inc. At the end of August 2014, his first month of ownership, Alberto is trying to prepare monthly financial statements. Information follows for transactions that occurred in August: 1. At August

> A partial adjusted trial balance of Joy Limited at January 31, 2014, shows the following: Instructions Answer the following questions, assuming the company's fiscal year begins January 1: (a) If the amount in Supplies Expense is the January 31 adjusting

> On May I, Bashir and Hendricks (B&H), Accountants, pays $1,200 to a landlord for one month's rent in advance for the month of May. (a) Assuming that B&H records all prepayments in (permanent) balance sheet accounts: 1. Prepare the journal entry B&H shoul

> Suli Mani opened a legal practice on January 1, 2014. During the first month of operations, the following transactions occurred. 1. Performed services for clients represented by insurance companies. At January 31, $6,000 of such services was earned but n

> Black-Eyed Pears Ltd. initially records all prepaid costs as expenses and all revenue collected in advance as revenues. The following information is available for the year ended December 31, 2014. 1. Purchased a one-year insurance policy on May I, 2014,

> At Sugarland Ltd., prepaid costs are debited to expense when cash is paid and unearned revenues are credited to revenue when the cash is received. During January of the current year, the following transactions occurred. On January 31, it is determined t

> A review of the accounts of Tucker and Wu Pan Accountants reflected the following transactions, which may or may not require adjustment at the year ended December 31, 2014. 1. The Prepaid Rent account shows a debit of $7,200 paid October 1, 2014, for a o

> On December 31, the adjusted trial balance of Domino Inc. shows the following selected data: Analysis shows that adjusting entries had been made, and included above, for (1) $9,700 of services performed but not billed, and (2) $6,400 of accrued but unpa

> On December 31, adjusting information for Big & Rich Corporation is as follows: 1. Estimated depreciation on equipment is S3, 400. 2. Property taxes amounting to $2,525 have been incurred but are unrecorded and unpaid. 3. Employee wages that are earned b

> Lazy Dog Inc. is a small private company that prepares monthly financial statements from a work sheet. Selected parts of the February work sheet showed the following data: During February, no events occurred that affected these accounts. At the end of F

> On July 1, 2014, Blondie Ltd. pays $18,000 to No Claims Insurance Ltd. for a three-year insurance contract. Both companies have fiscal years ending December 31. Prepare two sets of journal entries for Blondie, with each set of journal entries recording t

> The adjusted trial balance of North Bay Corporation is provided in the following work sheet for the year ended December 31, 2014. Instructions The note payable is due in four months. Complete the work sheet and prepare a statement of financial position

> Yeliw Enterprises purchases inventory amounting to $12,000, and records the expenditure as a debit to Office Equipment. What would be the effect of this error on the balance sheet and income statement in the period of the purchase, assuming the inventory

> One Wiser Corp. had the following transactions during the first month of business. Journalize the transactions. August 2 Invested $12,000 cash and $2,500 of equipment in the business in exchange for common shares. 7 Purchased supplies on account for

> Recently, your Uncle Warren, who knows that you always have your eye out for a profitable investment, has discussed the possibility of your purchasing some corporate bonds that he just learned of. He suggests that you may wish to get in on the ground flo

> Indicate the qualitative characteristic of financial information being described in each item below: (a) Financial statements should include all information necessary to portray the underlying transactions. (b) Financial information should make a differe

> A Special Committee on Financial Reporting proposed the following constraints related to financial reporting. 1. Business reporting should exclude information outside of management's expertise or for which management is not the best source, such as infor

> The following transactions fall somewhere in the continuum of the choices in accounting decision-making that are shown in Illustration 2-5. 1. The company president approaches one of the company's creditors to ask for a modification of the repayment te

> For each item that follows, indicate which element of the financial statements it belongs to: (a) Retained earnings (b) Sales Revenue (c) Acquired goodwill (d) Inventory (e) Depreciation (f) Loss on sale of equipment (g) Interest payable (h) Dividends

> You are hired to review the accounting records of Sheridan Corporation (a public corporation) before it closes its revenue and expense accounts as at December 31, 2014, the end of its current fiscal year. The following information comes to your attention

> Examples of some operational guidelines used by accountants follow. 1. The treasurer of Sweet Grapes Corp. would like to prepare financial statements only during downturns in the company's wine production, which occur periodically when the grape crop fai

> The following are operational guidelines and practices that have developed over time for financial reporting. 1. Price-level changes (inflation and deflation) are not recognized in the accounting records. 2. Financial information is presented so that rea

> The foundational principles of accounting are as follows: Recognition/ Derecognition 1. Economic entity 2. Control 3. Revenue recognition and realization 4. Matching Measurement 5. Periodicity 6. Monetary unit 7. Going concern 8. Historical cost 9. Fair

> Lucky Enterprises is using a discounted cash flow model. Identify which model Lucky might use to estimate discounted fair value under each scenario, and calculate the fair value: Scenario 1: Cash flows are fairly certain $1 00/year for 5 years Risk-adjus

> Medici Patriarchs purchased the following investments during 2014: (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

> Repeat BE2-6 but apply the definition of a liability proposed by the IASB and FASB. BE2-6 Discuss whether the following items would meet the definition of a liability using the criteria currently in place under IFRS. If so, explain with reference to th

> Discuss whether the following items would meet the definition of a liability using the criteria currently in place under IFRS. If so, explain with reference to the appropriate criteria. (a) Environmental remediation when a chemical spill has occurred. Th

> Refer to BE2-4. Discuss whether the items identified would be considered assets if the definition proposed by IFRS were applied. BE2·4 Discuss whether the following items would meet the definition of an asset using the IFRS definitions currently in pla

> The conceptual framework identifies the fundamental and enhancing qualitative characteristics that make accounting information useful. Instructions Answer the following questions related to these qualitative characteristics. (a) 'Which quality of financi

> 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) Maxwell Ltd. owns a corporate fleet of cars for senior management's us

> What principle(s) from the conceptual framework does Hen day Limited use in each of the following situations? (a) Henday includes the activities of its subsidiaries in its financial statements. (b) Henday was involved in litigation with Kinshasa Ltd. ove

> 'What is the objective of financial reporting? For each of the situations discussed below, explain the qualitative characteristics of financial information that help provide decision-useful information to users. (a) Marcus Corp. has a management bonus pl

> Using fair values came under attack in light of the credit crunch of the last decade and the related financial crisis. Some have even accused fair value accounting of exacerbating the crisis. Access the following articles: "Discussing the Credit Crunch,"

> In its 2011 financial statements (Note 4), Air Canada has disclosed its critical estimates and judgments used in preparation of the financial statements. Instructions Access the 2011 annual report for Air Canada for the year ended December 31,2011, from

> Obtain the 2011 financial statements of Teck Resources Limited from SEDAR (www.sedar.com). Instructions (a) Using the notes to the consolidated financial statements, determine the company's revenue recognition policy. Comment on whether the company uses

> An accountant must be familiar with the concepts involved in determining the earnings of a business entity. The amount of earnings that is reported for a business entity depends on the proper recognition, in general, of revenues and expenses for a specif

> In the IASB standard-setting conceptual framework, the word "reliability" has been replaced with "faithful representation." This has caused much discussion among preparers of financial information. This change has led to other implications related to sub

> Roger Chang has some questions about the theoretical framework in which standards are set. He knows that standard setters are continually striving to develop a conceptual framework for the formulation of accounting theory. Yet Roger's supervisors have sa

> The elements that are most directly related to measuring an enterprise performance and financial status follow: Instructions (a) Indicate which element is being described below. For any item that is an asset or liability, consider if the item qualifies u

> Hoda Inc. owns 25% of the common shares of Willard Corp. The other 75% are owned by the Willard family. Hoda acquired the shares eight years ago through a financing transaction. Each year, Hoda has received a dividend from Willard. Willard has been in bu

> The proposed definition of a liability is a "present economic obligation for which the entity is the obligor." These terms can be further expanded as follows (as taken from l>\SB Board meeting minutes): "Present'' means at the report date that an economi

> The fair value hierarchy establishes three levels of input, with level one being the best type, because it uses the most objective inputs, and level three using the most subjective inputs. Instructions For each of the following scenarios, identify the le

> (Bre-X), a small mining company, announced in the early 1990s that it had discovered a fairly significant gold deposit in Indonesia. The company's shares skyrocketed from pennies a share to over $280 per share. Subsequently, it was discovered that the co

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

> The statement that follows about Timber Company appeared in a financial magazine: The land and timber holdings are now carried on the company's books at a mere S100 million (U.S.). The value of the timber alone is variously estimated at $1 billion to $3

> Its basic business is high-temperature treatment Services for contaminated soil. In its 2011 financial statements, the company had a loss of $9.3 million (and an accumulated deficit of $43.7 million). In the notes to the financial statements, the company

> Accounting information provides useful data about business transactions and events. The people who provide and use financial reports must often select and evaluate accounting alternatives. The conceptual framework that was discussed in this chapter exami

> Transactions from Lucky Bamboo, Inc.'s current year follow. 1. Lucky Bamboo, Inc. thinks it should dispose of its excess land. VVhile the book value is $50,000, current market prices are depressed and only $25,000 is expected upon disposal. The following

> Fusters, Inc. issues audited financial statements to its creditors and is required to maintain certain covenants based on its debt to equity ratio and return on assets. In addition, management of Fusters receives a bonus partially based on revenues for t

> Foundational principles of financial reporting may be grouped into four categories: recognition / derecognition, measurement, presentation, and disclosure. Instructions Briefly describe what is meant by these terms.

> Meerkat Industries would like to determine the fair value of its manufacturing facility in London, Ontario. The facility consists of land, building, and manufacturing equipment. Instructions (a) Identify some of the considerations that are involved in a

> Instructions (a) Explain the meaning and implications of the going concern assumption in financial accounting. (b) If the going concern assumption did not apply in accounting, how would this affect the amounts shown in the financial statements for the fo

> The following information is for Brittany, Inc. 1. To be more concise, the company decided that only net income should be reported on the income statement. Details on revenues, cost of goods sold, and expenses were also omitted from the notes. 2. Equipme

> The following are transactions recorded by Bounce Corporation during the current year. 1. Ordinary operating maintenance on equipment was recorded as follows: 2. The company received an advance on a custom order for merchandise that will be shipped durin

> Some individuals have argued that all Canadian companies should follow the same set of accounting principles. Explain why there are multiple sets of standards in Canada.