Exam 14: Corporations: Additional Topics and Ifrs

A prior period adjustment that corrects profit of a prior period requires that an entry be made to

Retained earnings are always shown in before tax amounts, NOT net of tax amounts.

Corporations generally issue stock dividends in order to

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

At January 1, 2014, Morrisey Corporation had the following share capital. At that time no preferred dividends were in arrears: On July 1, 2014, the board of directors declared and paid a $1.50 cash dividend on common shares, and the full annual dividend to which the preferred shareholders were entitled. On October 1, 2014, Morrisey sold an additional 80,000 common shares for proceeds of $280,000. The corporation earned $650,000 during the year. Instructions a. Calculate Morrisey's earnings per share for 2014. b. Calculate Morrisey's total dividend payout ratio for 2014.

Which one of the following events would NOT require a formal journal entry on a corporation's books?

At January 1, 2013, Leblanc Corporation had the following shareholders' equity: On March 12, 2013, when the common shares have a market value of $18, the board of directors declared and paid a 10% common stock dividend. On July 31, 2013, the board declared a 2-for-1 stock split on the common shares. During the year, the company paid cash dividends of $80,000 and reported profit of $435,000. -At its December 31 year end, the balance in share capital is

A stock split will increase share capital.

Identify the effect the declaration of a stock dividend has on total share capital, retained earnings, and shareholders' equity.

In a 2 for 1 stock split, two shares are exchanged for one share.

Companies following ASPE are required to prepare all of the following statements EXCEPT

A company may reacquire its own shares for all of the following reasons EXCEPT

At January 1, 2014, Stevenson Inc. had the following shares authorized and issued: During 2014, Stevenson had the following share transactions: Feb 1 Issued 5,000 preferred shares. Apr 1 Issued 20,000 common shares. Aug 1 Issued 18,000 common shares. Dec 1 Issued 6,000 common shares. On December 31, Stevenson declared a $9 per share dividend on all issued preferred shares. Stevenson's 2014 profit was $435,000. Instructions a. Calculate the weighted average number of common shares in 2014. b. Calculate the profit available to common shareholders for 2014. c. Calculate the 2014 earnings per share.

All companies following IFRS must report comprehensive income.

Which is the main difference between a stock split and a stock dividend?

Blandon Corporation has 100,000 common shares and 10,000, $1 preferred shares currently issued. During the year, the company paid and declared a 10% stock dividend when the market price of the common shares was $7.75. As well, the company paid the preferred dividend and paid $80,000 in cash to the common shareholders. If Blandon earned $360,000 during the year, its payout ratio is

Common Stock Dividends Distributable is shown within the Share Capital subdivision of the statement of changes in shareholders' equity.

During 2014, Quest Corporation had the following transactions and events: 1. Issued preferred shares for cash. 2. Issued common shares for cash. 3. Completed a 2-for-1 stock split of the common shares. 4. Declared a stock dividend when the market value was higher than the issue price. 5. Declared a cash dividend. 6. Issued the common shares required by the stock dividend declaration in 4 above. Instructions Indicate the effect(s) of each of the foregoing items on the subdivisions of shareholders' equity. Present your answers in tabular form with the following columns. Use (I) for increase, (D) for decrease, and (NE) for no effect.

A constant payout ratio is more anticipated in a company with stable earnings.

Peterson Corporation reported the following information related to the year ended July 31, 2014: Instructions Prepare Peterson's statement of comprehensive income, statement of changes in shareholders' equity, and the shareholders' equity section of Peterson's balance sheet at July 31, 2014. Ignore tax effects.