Question 1

The change to IFRS or to ASPE had the following effect on the financial statements of the company:

Accepted Answer

A)  all financial statements had to retroactively apply the new standards. 
B)  all financial statements had to proactively apply the new standards. 
C)  the financial statements remained the same, the change was explained in the notes to the financial statements. 
D)  As this was a change in circumstances, they applied this change to present and future periods. 
A)  all financial statements had to retroactively apply the new standards. 
B)  all financial statements had to proactively apply the new standards. 
C)  the financial statements remained the same, the change was explained in the notes to the financial statements. 
D)  As this was a change in circumstances, they applied this change to present and future periods.

Question 2

A stock split will usually result in an increase in the market value of a share.

Accepted Answer

A) True 
 B)False

Question 3

The correction of a prior period error in which the cost of goods sold was understated would require which of the following?

Accepted Answer

A)  debit to Cost of Goods Sold 
B)  credit to Cost of Goods Sold 
C)  debit to Retained Earnings 
D)  credit to Retained Earnings 
A)  debit to Cost of Goods Sold 
B)  credit to Cost of Goods Sold 
C)  debit to Retained Earnings 
D)  credit to Retained Earnings

Question 4

A stock dividend makes no difference to overall share capital of the company.

Accepted Answer

A) True 
 B)False

Question 5

The board of directors generally assigns a per share value to a stock dividend declared that is

Accepted Answer

A)  greater than the book value. 
B)  at the discretion of the board of directors. 
C)  equal to the issue price of the original share. 
D)  equal to the fair market value per share. 
A)  greater than the book value. 
B)  at the discretion of the board of directors. 
C)  equal to the issue price of the original share. 
D)  equal to the fair market value per share.

Question 6

Gabrial Ltd. was incorporated February 1, 2014 and is authorized to issue an unlimited number of preferred and common shares. The company entered into the following transactions during the year:
Feb 10 Issued 30,000 common shares for $2.30 per share.
Feb 21 Issued 4,000 common shares to the company's accountants as payment for a bill of $18,000 for services performed in helping the company to incorporate.
Mar 16 Issued 1,000 preferred shares for $95 per share.
Sep 10 Reacquired 3,000 common shares for $1.75 per share.
Instructions
Prepare the journal entries to record the above transactions.

Accepted Answer

@#IMG-DLM& *Average Cost per C

Question 7

The following information is available for Reynolds Corporation:   The company accountant, in preparing financial statements for the year ending December 31, 2014, has discovered the following information:
The company's previous bookkeeper, who has been fired, had recorded depreciation expense on a machine in 2012 and 2013 using the double diminishing-balance method of depreciation. The bookkeeper neglected to use the straight-line method of depreciation which is the company's policy. The cumulative effect of the error on prior years was $9,000. Depreciation was calculated by the straight-line method in 2014. Reynolds' average tax rate is 22%. During 2014, Reynolds declared and paid cash dividends of $80,000.
Instructions 
a. Calculate the impact on retained earnings.
b. Prepare the statement of retained earnings for 2014.

Accepted Answer

a. Retained Earnings

Question 8

Appier Corporation had the information listed below available in preparing an income statement for the year ended December 31, 2014. All amounts are before income taxes. Assume a 30% income tax rate for all items.   Instructions
Prepare a multiple-step income statement in good form.

Accepted Answer

The answer of Appier Corporation had the information listed below...

Question 9

When stock dividends are distributed,

Accepted Answer

A)  Common Stock Dividends Distributable is decreased. 
B)  Retained Earnings is decreased. 
C)  Cash is decreased. 
D)  no entry is necessary if it is a large stock dividend. 
A)  Common Stock Dividends Distributable is decreased. 
B)  Retained Earnings is decreased. 
C)  Cash is decreased. 
D)  no entry is necessary if it is a large stock dividend.

Question 10

A shareholder who receives a stock dividend would

Accepted Answer

A)  expect the market price per share to increase. 
B)  own more shares. 
C)  expect retained earnings to increase. 
D)  expect the overall value of his or her shares to change. 
A)  expect the market price per share to increase. 
B)  own more shares. 
C)  expect retained earnings to increase. 
D)  expect the overall value of his or her shares to change.

Question 11

In the statement of changes in shareholders' equity,

Accepted Answer

A)  Common Stock Dividends Distributable will be classified as a contra account to Retained Earnings. 
B)  Common Stock Dividends Distributable will appear in its own subsection of share-holders' equity. 
C)  Preferred and Common Shares appear under the subsection Share Capital. 
D)  Dividends in Arrears will appear as a restriction of Retained Earnings. 
A)  Common Stock Dividends Distributable will be classified as a contra account to Retained Earnings. 
B)  Common Stock Dividends Distributable will appear in its own subsection of share-holders' equity. 
C)  Preferred and Common Shares appear under the subsection Share Capital. 
D)  Dividends in Arrears will appear as a restriction of Retained Earnings.

Question 12

At the declaration date, the stock dividend account is increased by the fair market value of the shares to be issued.

Accepted Answer

A) True 
 B)False

Question 13

The price-earnings ratio (PE ratio) tells us

Accepted Answer

A)  whether assets are liquid. 
B)  whether debts are too high. 
C)  the impact of inflation. 
D)  whether the shares are a good investment in terms of earnings. 
A)  whether assets are liquid. 
B)  whether debts are too high. 
C)  the impact of inflation. 
D)  whether the shares are a good investment in terms of earnings.

Question 14

Which of the following transactions would NOT be included in the Statement of Changes in Shareholders' Equity?

Accepted Answer

A)  declaration of a stock dividend 
B)  reacquisition of shares at a loss 
C)  shares issued for cash 
D)  gain on discontinued operations 
A)  declaration of a stock dividend 
B)  reacquisition of shares at a loss 
C)  shares issued for cash 
D)  gain on discontinued operations

Question 15

If a corporation declares a 10% stock dividend on its common shares, the account to be debited on the date of declaration is

Accepted Answer

A)  Common Stock Dividends Distributable. 
B)  Common Shares. 
C)  Cash. 
D)  Stock Dividends (Retained Earnings). 
A)  Common Stock Dividends Distributable. 
B)  Common Shares. 
C)  Cash. 
D)  Stock Dividends (Retained Earnings).

Question 16

All of the following are normally found in a corporation's shareholders' equity section EXCEPT

Accepted Answer

A)  dividends in arrears. 
B)  common shares. 
C)  share capital. 
D)  retained earnings. 
A)  dividends in arrears. 
B)  common shares. 
C)  share capital. 
D)  retained earnings.

Question 17

At January 1, 2013, Jones Corporation had the following share capital: $2 Preferred shares, noncumulative,   On February 16, 2013 the board of directors declared and paid a 10% common stock dividend. On July 31, 2013, the board declared a 3-for-1 stock split on the common stock. On its December 31, 2013 financial statements, Jones Corporation will report how many common shares issued?

Accepted Answer

A)  10,000 
B)  11,000 
C)  30,000 
D)  33,000 
A)  10,000 
B)  11,000 
C)  30,000 
D)  33,000

Question 18

The change in 2011 from Canadian GAAP to either IFRS or ASPE required a retroactive change in a company's financial statements.

Accepted Answer

A) True 
 B)False

Question 19

The market price of Sanji's Paper Inc.'s common shares was $50 per share as quoted in today's Globe and Mail. Earnings per share were $5.
Instructions
Calculate the price-earnings ratio for Sanji. If the price-earnings ratio is high, what can the ratio mean?

Accepted Answer

Price-earnings ratio = $50 ÷ $5 = 10
The

Question 20

Prior period adjustments are reported

Accepted Answer

A)  in the notes of the current year's financial statements. 
B)  on the current year's balance sheet. 
C)  on the current year's income statement. 
D)  on the current year's statement of retained earnings. 
A)  in the notes of the current year's financial statements. 
B)  on the current year's balance sheet. 
C)  on the current year's income statement. 
D)  on the current year's statement of retained earnings.

The change to IFRS or to ASPE had the following effect on the financial statements of the company:

A stock split will usually result in an increase in the market value of a share.

The correction of a prior period error in which the cost of goods sold was understated would require which of the following?

A stock dividend makes no difference to overall share capital of the company.

The board of directors generally assigns a per share value to a stock dividend declared that is

Appier Corporation had the information listed below available in preparing an income statement for the year ended December 31, 2014. All amounts are before income taxes. Assume a 30% income tax rate for all items. Instructions Prepare a multiple-step income statement in good form.

When stock dividends are distributed,

A shareholder who receives a stock dividend would

In the statement of changes in shareholders' equity,

At the declaration date, the stock dividend account is increased by the fair market value of the shares to be issued.

The price-earnings ratio (PE ratio) tells us

Which of the following transactions would NOT be included in the Statement of Changes in Shareholders' Equity?

If a corporation declares a 10% stock dividend on its common shares, the account to be debited on the date of declaration is

All of the following are normally found in a corporation's shareholders' equity section EXCEPT

The change in 2011 from Canadian GAAP to either IFRS or ASPE required a retroactive change in a company's financial statements.

The market price of Sanji's Paper Inc.'s common shares was $50 per share as quoted in today's Globe and Mail. Earnings per share were $5. Instructions Calculate the price-earnings ratio for Sanji. If the price-earnings ratio is high, what can the ratio mean?

Prior period adjustments are reported

Accounting in Action

The Recording Process

Adjusting the Accounts

Completion of the Accounting Cycle

Accounting for Merchandising Operations

Inventory Costing

Internal Control and Cash

Long-Lived Assets

Current Liabilities

Accounting Principles

Accounting for Partnerships

Introduction to Corporations

Non-Current Liabilities

The Cash Flow Statement

Financial Statement Analysis

Investments

Filters

Exam 14: Corporations: Additional Topics and Ifrs

The change to IFRS or to ASPE had the following effect on the financial statements of the company:

A stock split will usually result in an increase in the market value of a share.

The correction of a prior period error in which the cost of goods sold was understated would require which of the following?

A stock dividend makes no difference to overall share capital of the company.

The board of directors generally assigns a per share value to a stock dividend declared that is

Appier Corporation had the information listed below available in preparing an income statement for the year ended December 31, 2014. All amounts are before income taxes. Assume a 30% income tax rate for all items. Instructions Prepare a multiple-step income statement in good form.

When stock dividends are distributed,

A shareholder who receives a stock dividend would

In the statement of changes in shareholders' equity,

At the declaration date, the stock dividend account is increased by the fair market value of the shares to be issued.

The price-earnings ratio (PE ratio) tells us

Which of the following transactions would NOT be included in the Statement of Changes in Shareholders' Equity?

If a corporation declares a 10% stock dividend on its common shares, the account to be debited on the date of declaration is

All of the following are normally found in a corporation's shareholders' equity section EXCEPT

The change in 2011 from Canadian GAAP to either IFRS or ASPE required a retroactive change in a company's financial statements.

The market price of Sanji's Paper Inc.'s common shares was $50 per share as quoted in today's Globe and Mail. Earnings per share were $5. Instructions Calculate the price-earnings ratio for Sanji. If the price-earnings ratio is high, what can the ratio mean?

Prior period adjustments are reported

Accounting in Action

The Recording Process

Adjusting the Accounts

Completion of the Accounting Cycle

Accounting for Merchandising Operations

Inventory Costing

Internal Control and Cash

Long-Lived Assets

Current Liabilities

Accounting Principles

Accounting for Partnerships

Introduction to Corporations

Non-Current Liabilities

The Cash Flow Statement

Financial Statement Analysis

Investments

Filters