Exam 2: Intermediate Accounting Volume 2

Non-accumulating rights to benefits, such as parental leave, are generally accounted for by

On February 10, 2014, after issuance of its financial statements for calendar 2013, Diogenes Corp.entered into a financing agreement with Gigantic Bank, allowing Diogenes Corp.to borrow up to $6,000,000 at any time through 2016.Amounts borrowed under the agreement bear interest at 2% above the bank's prime interest rate and mature two years from the date of the loan.Diogenes presently has $2,250,000 of notes payable with Provincial Bank maturing March 15, 2015.The company intends to borrow $3,750,000 under the agreement with Gigantic and pay off the notes payable to Provincial.The agreement with Gigantic also requires Diogenes to maintain a working capital level of $9,000,000 and prohibits the payment of dividends on common shares without prior approval by Gigantic.From the above information only, the total short-term debt of Diogenes Corp.on the December 31, 2013 statement of financial position is

Assuming a corporation has no contributed surplus booked, when shares are reacquired at a cost greater than their original issue price and cancelled, what account(s)should be debited?

On January 1, 2014, Wick Ltd.leased a building to Candle Corp.for a ten-year term at an annual rental of $90,000.At the inception of the lease, Wick received $360,000 covering the first two years rent of $180,000 and a security deposit of $180,000.This deposit will NOT be returned to Candle upon expiration of the lease but will be applied to payment of rent for the last two years of the lease.What portion of the $360,000 should be shown as a current and long- term liability, respectively, in Wick's December 31, 2014 statement of financial position?

Taxable income and accounting income Explain the difference between accounting income and taxable income.

Reacquisition of shares Norway Corp.originally sold 1,000,000 of its no par common shares at $13 a share.Later, Norway bought back 6,000 shares of these shares at $17 a share.Norway is incorporated under the CBCA and therefore retired these shares. Instructions Record the retirement of the shares.

A dividend which is a return to shareholders of a portion of their original capital investments is known as a

Regarding zero-interest-bearing notes,

On January 1, 2014, Linen Corp.issued $450,000 (face value), 10%, ten-year bonds at 103. The bonds are callable at 105.Linen has recorded amortization of the bond premium by the straight-line method. On December 31, 2020, Linen repurchased $100,000 of the bonds in the open market at 96. Bond interest expense and premium amortization have been recorded for 2020.Ignoring income taxes, what is the loss or gain arising from this reacquisition?

Note issued for cash and other rights Rebecca Land Corp.issued a 5-year, zero-interest-bearing note with a $1,000,000 face value to Lindsay Inc.for $1,000,000 cash.Rebecca also gave Lindsay the right to use a parcel of land for equipment storage for 5 years.Interest rates for notes of this type were 8% at the time of issue. Instructions Prepare the journal entries to record the issuance of the note by (1)Rebecca and (2)Lindsay. Use your calculator and round values to the nearest dollar.

The rate of return on common shareholders' equity shows

On July 1, 2014, Cee Corp.issued 1,000 of its no par common shares and 2,000 of its no par preferred shares for a lump sum of $100,000.At this date Cee's common shares were selling for $48 per share and the preferred shares for $36 per share.Using the relative fair value method, the amount of the proceeds allocated to the preferred shares account should be

Subscriptions Receivable are reported as

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. -To the nearest percent, the rate of return on common shareholders' equity for 2015 is

Use the following information for questions. -The present value of the principal is

The cumulative feature of 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. -Lisbon Corp.has 1,000,000 no par common shares authorized, of which 800,000 shares are outstanding.The average carrying value of the shares is $5 per share.When the market value was $10 per share, Lisbon declared a 10% stock dividend.What entry, if any, should Lisbon make to record this dividend declaration?

When shares are reacquired at a cost less than the average per share value, the difference is credited to

Pension asset terminology Discuss the following ideas related to pension assets: a.Actual return on plan assets. b.Expected return on plan assets. c.Unexpected gains and losses on plan assets.

On April 30, 2014, Canuck Oil Corp.purchased an oil tanker depot for $1,200,000 cash.The company expects to operate this depot for eight years, at which time they will be legally required to dismantle the structure and remove the underground storage tanks.Canuck Oil estimates this asset retirement obligation (ARO)will cost $200,000.Assuming a 5% discount rate, to the nearest dollar, the amount to be recorded as the ARO is