Exam 2: Intermediate Accounting Volume 2

Eff Ltd.was organized on January 2, 2014, with 100,000 no par value common shares authorized.During 2014, Eff had the following capital transactions: Jan 5 Issued 75,000 shares at $14 per share Jul 27 Purchased and retired 5,000 shares at $10 per share Nov 25 Issued 4,000 shares at $13 per share What would be the balance in the Contributed Surplus account at December 31, 2014?

Accounting procedures for bond redemptions Describe the accounting procedures for the early redemption of bonds.

Asset Retirement Obligation Tin Mines International Ltd.discovered a new iron ore deposit, the Grouse Mine, and began production on January 1, 2014.The province requires mining companies to return the land to its natural state at the end of mining activity.Tin Mines International estimates that it will operate the mine for 25 years, at which time it will cost $25,000,000 for the land restoration project.Tin Mines International uses an 8% discount rate, and follows ASPE. Instructions a.Record any obligation for land restoration at January 1, 2014. b.Record any entry required related to this obligation at December 31, 2014.

Entries for bonds payable Prepare journal entries to record the following transactions relating to long-term bonds of Lancaster Inc.Show calculations and round to the nearest dollar. a.On June 1, 2014, Lancaster Inc.issued $400,000, 6% bonds for $391,760, including accrued interest.The bonds were dated February 1, 2014, and interest is payable semi- annually on February 1 and August 1 with the bonds maturing on February 1, 2024.The bonds are callable at 102. b.On August 1, 2014, Lancaster paid the semi-annual interest and recorded the amortization of the discount or premium, using straight-line amortization. c.On February 1, 2016, Lancaster paid the semi-annual interest and recorded amortization of the discount or premium. d.The company then purchased $240,000 of the bonds at the call price.Assume that a reversing entry was made on January 1, 2016.

On December 31, 2014, Monaco Ltd.had outstanding 2,000 no par value, $6, cumulative preferred shares and 30,000 no par value common shares.At this time, dividends in arrears on the preferred shares were $6,000.Cash dividends declared in 2015 totalled $30,000.The amounts paid to each class of shares were

At December 31, 2014, the 12% bonds payable of Leather Corp.had a carrying value of $312,000.The bonds, which had a face value of $300,000, were issued at a premium to yield 10%.Leather uses the effective interest method of amortization of bond premium.Interest is paid on June 30 and December 31.On June 30, 2015, Leather retired the bonds at 104 plus Long-Term Financial Liabilities 14- 17 accrued interest.The loss on retirement, ignoring taxes, is

Under ASPE, an asset retirement obligation should be recognized when

An investment in marketable securities was distributed to shareholders as a property dividend.The dividend should be recorded at the

Use the following information for questions. The following data are provided for Croatia Corp.'s last two fiscal years: Shareholders' Equity 15- 27 Additional information: On May 1, 2015, 6,000 common shares were issued.Although dividends had been declared regularly up to December 31, 2014, preferred dividends were NOT declared during 2015.The market price of the common shares was $100 at December 31, 2015. -Aye Corp.was organized in January 2014 with authorized capital of 1,000,000 no par value common shares.On February 1, 2014, shares were issued at $10 per share.On March 1, 2014, the corporation's lawyer accepted 7,000 common shares with a fair value of $85,000 in settlement for legal services.Total shareholders' equity would increase on

The price earnings (P/E)ratio is calculated by

On June 30, 2014, when Vienna Inc.'s shares were selling at $65 per share, its capital accounts were as follows: Common Shares, no par, 60,000 shares issued and outstanding .................................................................$2,400,000 Retained Earnings ....................................................................3,600,000 If a 5% stock dividend were declared and distributed, the Common Shares account balance would be

Noncumulative preferred dividends in arrears

Granger Ltd.reported the following information on their most recent statement of financial position: To the nearest percent, what is Granger's debt to total assets?

Krypton Foods distributes coupons to consumers which may be presented, on or before a stated expiry date, to grocery stores for discounts on certain Krypton products.The stores are reimbursed when they send the coupons in to Krypton.In Krypton's experience, only about 50% of these coupons are redeemed.During 2014, Krypton issued two separate series of coupons as follows: Krypton's only journal entries for 2014 recorded debits to coupon expense, and credits to cash of $268,000.Their December 31, 2014 statement of financial position should include a liability for unredeemed coupons of

Using the revenue approach of accounting for product guarantees and warranty obligations

Which of the following statements is NOT generally true about the legality of dividend distributions?

Dividends on cumulative preferred shares

Use the following information to answer questions Prague Corp.is authorized to issue 400,000 no par value common shares.Subscribers agree to purchase shares at $15 per share with a 30% down payment. -Assume that subscribers agree to purchase 50,000 shares and make the required down payment.The journal entry to record receipt of the subscriptions includes a

Approaches to accounting for pension expense Discuss the difference between the immediate recognition approach and the deferral and amortization approach when accounting for annual pension expense.

Under IFRS, the Statement of Changes in Shareholders' Equity must include Shareholders' Equity 15- 17