Exam 14: Corporations: Additional Topics and Ifrs

The correction of a prior period error would only affect the account in which the error has occurred.

Earnings per share is only done for common shares.

Moreland Holdings Inc. has authorized share capital of an unlimited number of common shares and 1,000,000 preferred, $3-cumulative preferred shares. At January 1, 2014, the balances in its share capital accounts were $45,000 in common shares representing 15,000 shares and $30,000 in preferred shares representing 1,000 shares. The company had a balance of $50,000 in contributed surplus from previous years' repurchase of common shares. The retained earnings balance on that date was $180,000 and accumulated other comprehensive income was $62,000. Profit for the year ending December 31, 2014 was $24,000 and other comprehensive income items for the year were $5,000. There were no dividends in arrears at January 1, 2014 and no dividends were declared during 2014. During 2014, Moreland had the following share transactions: Mar 1 Issued 4,000 common shares for $5 each. Jun 30 Issued 500 preferred shares for $11 each. Sep 1 Issued 60,000 common shares in exchange for land valued at $285,000. Dec 1 Reacquired 50,000 common shares for $5.25 each. Instructions a. Journalize the share transactions. b. Prepare the equity section of Moreland's balance sheet at December 31, 2014 and describe any additional disclosure required related to share capital.

When a company reacquires shares at a loss and there is no balance in contributed capital, then there will be a debit to retained earnings for the amount of the loss.

Accumulated other comprehensive income is reported in the income statement under other income.

Common Stock Dividends Distributable is classified as

When an operation is discontinued, the disposal is reported in two parts; the profit (loss) from present operations and the profit (loss) from past operations.

Chan Inc. has a profit of $1,000,000 for 2013, and there are 400,000 common shares issued. Dividends declared and paid during the year amounted to $200,000 on the preferred shares and $300,000 on the common shares. The earnings per share for 2013 is

The following is information taken from the shareholders' equity section of the projected summary financial statements of Blair Bonds Corp. to December 31, 2014, prior to the board of directors' meeting to decide on dividends or other share transactions related to its 10,000 issued common shares for the year. Instructions Prepare in four-column comparative format, the shareholders' equity section as it would appear under each of the following possible options that the board is considering. Only one of the options will be chosen, so assume they are mutually exclusive. Describe any additional disclosure that would be required. a. The board declares a 20% stock dividend. b. The board approves a 3-for-1 stock split.

At December 31, 2014, Sookie Limited has $500,000 of $4, cumulative preferred shares issued at $100 per share and $3,000,000 of common shares issued at $10 per share. Sookie's profit for the year is $960,000. Instructions Calculate earnings per share for 2014 under the following independent situations. (Round to two decimals.) a. The dividend to preferred shareholders was declared, and there has been no change in the number of common shares during the year. b. The dividend to preferred shareholders was not declared. The preferred shares are cumulative.

When a company reacquires its own shares at a price that is lower than the average issue price, there will be a loss on the reacquisition.

To calculate the weighted average number of common shares, any new shares issued during the year are

Lake Ltd. was incorporated July 1, 2013. The company is authorized to issue an unlimited number of preferred and common shares. The company entered into the following transactions during its fiscal year ending June 30, 2014: Jul 10 Issued 100,000 common shares for $12.50 per share. Jul 15 Issued 400,000 common shares for $13 per share. Sep 30 Issued 30,000 common shares in return for a warehouse. The common shares were trading for $15.50 on the date the warehouse was acquired. The assessed value of the warehouse on that date was $450,600. Mar 16 Issued 1,000 preferred shares for $95 per share. May 10 Reacquired 65,000 common shares for $15 per share. Instructions Record the above transactions.

Westcock Shipbuilding Ltd. has a December 31 year end. On January 1, 2013, the company had the following shareholder's equity accounts. Westcock Shipbuilding Ltd. had the following transactions during 2013: The company reported a profit of $450,000 and other comprehensive income of $15,000 for 2013. Instructions a. Record all of the transactions. b. Prepare the Statement of Changes in Shareholders' Equity.

Sonoma Lakes Ltd. (SLL) has the following authorized share capital: Unlimited Common voting shares 500,000 Class A, $5 cumulative preferred shares 500,000 Class B, $10 non-cumulative preferred shares During 2014, SLL had the following share transactions for cash: Jan 1 Issued 50,000 common shares for $100,000. Mar 12 Issued 1,000 Class A preferred shares for $60,000. Apr 30 Issued 20,000 common shares for $2.50 per share. Jun 20 Issued 3,000 Class B preferred shares for $70 per share. Jul 2 Reacquired 10,000 common shares for $3 per share. SLL did not declare any dividends during 2014. On December 31, 2015, a dividend of $3 per share was declared on preferred shares issued. Instructions a. Journalize the share transactions. b. Calculate the number of common shares issued at December 31, 2014 and the average cost per common share.

Ahab Fisheries Inc. has authorized share capital of an unlimited number of common shares and 300,000 $2-cumulative preferred shares. As of January 1, 2014, 50,000 common shares had been issued at an average cost of $4 each. During 2014, 10,000 common shares were issued on April 1 for cash of $45,000 and on July 1, 20,000 were issued at $4.75 each. On December 15, a cash dividend of $0.50 per share on all common shares was declared, payable to shareholders of record on December 31, and payable on January 20, 2015. On January 1, 2014, the first preferred shares were issued. $600,000 was received for 80,000 preferred shares. On October 1, the annual dividends on the preferred shares were declared, payable to shareholders of record on October 15, and payable on October 28. Retained earnings on January 1, 2014 were $336,000 and accumulated other comprehensive income was $57,000. Ahab had profit of $323,000 in 2014, and other comprehensive income items totalling $37,500. All dividends were paid on their due dates. On December 31, 2014, Ahab's common shares were trading at $76.50. Instructions a. Calculate the profit available to common shareholders. b. Calculate the weighted average number of common shares in 2014. c. Calculate the earnings per share. d. Calculate the price-earnings ratio at December 31, 2014.

At January 1, 2013, Karpo Corporation had the following share capital: On July 1, 2013, the board of directors declared and paid a 10% common stock dividend. On October 1, 2013, the company sold an additional 20,000 common shares for proceeds of $280,000. The corporation earned $150,000 during the year and declared $30,000 in dividends to preferred shareholders. -For the purpose of calculating the earnings per share, the company's weighted average number of common shares is

What would be the effect of a stock dividend on the accounts of the company?

Which of the following is a characteristic of neither a stock split nor a stock dividend?

At January 1, 2013, Karpo Corporation had the following share capital: On July 1, 2013, the board of directors declared and paid a 10% common stock dividend. On October 1, 2013, the company sold an additional 20,000 common shares for proceeds of $280,000. The corporation earned $150,000 during the year and declared $30,000 in dividends to preferred shareholders. -Earnings per share for 2013 is