Hyperchip Limited is a private corporation reporting under ASPE. At December 31, 2017, its general ledger contained

Question:

Hyperchip Limited is a private corporation reporting under ASPE. At December 31, 2017, its general ledger contained the following summary data:

Cost of goods sold................................................$950,000

Net sales............................................................1,425,000

Operating expenses.................................................270,000

Other expenses.......................................................30,000

Other revenues.......................................................45,000

Retained earnings, December 31, 2016........................1,150,000

Additional information:

1. In 2017, common share dividends of $80,000 were declared on June 26 and December 26. The dividends were paid on July 9, 2017, and January 9, 2018, respectively.

2. The company's income tax rate is 20%.

Instructions

(a) Record the dividend transactions in 2017.

(b) Prepare a multiple-step income statement for 2017.

TAKING IT FURTHER

If this company were following IFRS, what statement would have to be prepared instead of the statement of retained earnings?

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...