Exam 5: Introduction to Corporations

Alexandria Corporation has the following shareholders equity on July 31, 2021: The maximum number of common shares that Alexandria can issue is

Which of the following statements is NOT considered a disadvantage of the corporate form of organization?

Umbrello Plastics Limited reports the following shareholders' equity as of December 31, 2021: Instructions a) What was the average per share amount for common shares? (round to two decimal places) b) What was the average per share amount for preferred share? (round to two decimal places) c) Assume no dividends were declared last year and the board of directors declares $ 1,600,000 in total dividends in 2021. Calculate the amount per share each class of shares will receive. (round to two decimal places)

The following selected transactions pertain to the Saturn Corporation: Aug 20 Issued 20,000 common shares for $ 32 cash per share. Nov 3 Issued 800 common shares in exchange for machinery required for the shop with an appraised value of $ 60,000. Saturn Corporation's common shares have been actively traded on the Toronto Stock Exchange at $ 78 per share. Instructions Journalize the transactions.

At the end of each accounting year, the profit for the corporation will be closed into the account called Income Summary.

Dividends are declared out of

Private companies following ASPE are required to disclose for each class of shares, the

A cash dividend account is NEVER closed during the closing process.

Which of the following factors does NOT affect the initial market price of a share?

Tantramar Corporation has the following shareholders equity on July 31, 2020: Shareholders' equity Share capital Assume that during the following year the company had profit of $ 65,000 and declared and paid dividends of $ 15,000. The beginning balance of retained earnings on the statement of retained earnings for the year ended July 31, 2021 is

Which one of the following is NOT an ownership right of a shareholder in a corporation?

Which of the following Canadian companies must report under International Financial Reporting Standards?

If convertible preferred shares are converted into common shares,

Retained earnings will be reported on financial statements within the share capital section.

For the year ended August 31, 2021, Zen Fitness Inc. had service revenue of $ 625,000; operating expenses of $ 265,000 and other expenses of $ 32,000. The company has a 20% tax rate and has previously accrued $ 25,000 in income taxes. Instructions a) Determine the income tax expense. b) Prepare an income statement. c) Prepare the entry to record the income taxes.

Ursula Company declared dividends of $ 20,000 in fiscal 2021 and paid the $ 42,000 dividends that were declared in fiscal 2020. Ursula paid the 2021 dividends in early fiscal 2022. Which of the following journal entries would NOT be recorded in fiscal 2021?

Dividends are distributed from retained earnings.

Duke Inc. was incorporated on July 1, 2021 with authorized share capital of 1,000,000 common shares and 500,000 preferred $ 4 cumulative preferred shares, convertible to common shares at a rate of 10 common shares for each preferred share. During its first year of operations, Duke had profit of $ 126,000, and declared no dividends. Duke had the following transactions related to share capital during the year: Jul 1 2021 Issued 100,000 common shares for $ 2 each. Jul 1 2021 Issued 5,000 preferred shares for $ 75 each. Aug 15 2021 Issued 10,000 common shares for legal services received, valued at $ 25,000. Dec 1 2021 Issued 5,000 common shares at $ 2.25 each in exchange for equipment received. Mar 8 2022 Half of the preferred shares were converted to common shares. On this date, the market value of the common shares was $ 3.10 and the preferred share value was $ 80. Instructions a) Prepare the entries to record the share transactions described above. b) Prepare the shareholder equity section of Duke's balance sheet at June 30, 2022, the date of its first year end. c) Calculate the return on equity for the first year of operations. Use the July 1, 2021 share capital as the beginning balance for the purpose of calculating average shareholder equity.

China Corporation has the following shareholders' equity on December 31, 2021: Shareholders' equity Share capital $ 10 convertible preferred shares, 10,000 shares authorized, 5,000 shares issued $ 0,570,000 Common shares, no par value, 200,000 shares authorized, 90,000 shares issued 1,800,000 Total share capital 2,370,000 Retained earnings 450,000 Total shareholders' equity $ 2,820,000 If 500 preferred shares are converted into common shares what is the dollar value of the common shares issued?

Paris Corporation is a publicly held corporation whose shares, issued at $ 1 per share are actively traded at $ 20 per share. The company issued 1,000 shares to acquire land recently appraised at $ 15,000. When recording this transaction, Paris will