Exam 4: Statements of Financial Position and Changes in Equity; Disclosure Notes

Bonds payable due in six months and for which an adequate bond sinking fund exists is not a current liability because:

Deferred Income Tax Assets and Liabilities must be presented as non-current under IFRS.

Appropriated retained earnings are those earnings that have been set aside for a specific purpose (other than the payment of dividends).

Guarantees are always recorded as liabilities in the financial statements.

A loss contingency which is remote and cannot be reasonably estimated:

Assets and liabilities on the balance sheet are valued at:

A balance sheet is not particularly useful for determining the current market value of the assets of an entity.

A company made the following entry on January 1, year 1, to record the total premium paid for a three-year insurance policy: Insurance expense 36,000 Cash 36,000 The December 31, year 1, balance sheet should report the following amounts: Prepaid Insurance Deferred Charge 1 \ 24,000 None 2 None \ 12,000 3 \ 12,000 None 4 \ 12,000 \ 12,000

Interest-bearing investments with a maturity within six months of the balance sheet date are effectively cash equivalents.

Which of the following would NOT appear under the Equity section of a Balance Sheet prepared under ASPE?

In general, financial instruments should be classified according to their form, regardless of the instrument's substance.

The following transactions were completed by a corporation: (a) At the beginning of the year issued $25,000, 10 percent bonds payable (interest payable annually), due in 10 years, for $24,000 cash. Any bond premium or discount will be amortized on the straight-line basis. Give the entry to record the first interest payment. (b) Issued 3,500 shares of its common shares and received cash, $17,500, which was credited in full to the common shares subscribed account. Give the required correcting entry: (c) The working capital ratio for the company at the end of year one was 1.5 and the current assets, $156,750. Therefore, the current liabilities amounted to $______________________.

Under ASPE, a change in accounting policy may be voluntary or compulsory.

A corporation sold 10,000 shares of its no-par common for $10.00 per share. The corporation will not sell its shares for less than $6.00 per share, because this is "necessary" to protect the bondholders. The corporation should record this transaction as follows: 1 Common shares 60,000 Contributed capital in excess of par 40,000 Cash 100,000 2 Common shares 100,000 Cash 100,000 3 Cash 100,000 Common shares 100,000 4 Cash 100,000 Common shares 60,000 Contributed capital in excess of par 40,000

Which of the following would be classified in a different major section of a classified balance sheet from the others?

Most balance sheets do not have a separate caption "Deferred Credits" because they are disclosed under liabilities or owners' equity.

Which of the following need not appear as a stand-alone item on the statement of financial position under IFRS?

With respect to biological assets under IFRS, bearer plants are the only category that need not be measured at their fair value less costs to sell.

The shareholders' equity section is usually divided into which three parts on an ASPE Balance Sheet?

The beginning-of-the-year total owner's equity for a firm was $40,000. During the year, the firm issued common stock for a total proceeds of $20,000, earned $10,000 net income, and paid $5,000 in cash dividends. If ending total liabilities are $100,000, what is ending total assets?