Accounting Principles Volume 2 9th Canadian Edition Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak - Solutions

When calculating EPS: (a) Why is profit available to the common shareholders not always the same as profit? (b) Why is the weighted average number of shares used instead of the number of shares issued and outstanding at the end of the year?
Distinguish between basic earnings per share and fully diluted earnings per share.
What are the two components of comprehensive income?
Peninsula Supply Corporation provided the following schedule detailing the changes in the shareholders’ equity accounts during 2023 and 2024. Determine the missing amounts. Common shares, unlimited authorized Balance, January 1 Issued shares for cash Reacquired shares Balance, December
Refer to the data for Peninsula Supply Corporation presented in BE14.11. (a) Prepare the statement of changes in shareholders’ equity for the year ended December 31, 2024. (b) Prepare the shareholders’ equity section of the balance sheet at December 31, 2024.Data from
Northlake Limited reports profit of $454,000 and its weighted average number of common shares is 220,000. Northlake also has 22,000, $2.50 preferred shares. Calculate earnings per share under each of the following independent assumptions: a. preferred shares are cumulative and the dividend was
Franklin Corporation had 20,000 common shares on January 1, 2024. On March 1, 5,000 shares were repurchased. On June 1 and September 30, 6,000 and 10,000 shares were issued, respectively. Calculate the weighted average number of shares.
On December 31, 2023, Nettle Corporation had 5,000, $2 preferred shares and 80,000 common shares issued. During 2024, the company completed the following share transactions: Apr. 1 Sold 10,000 common shares for $5,000 cash. Sept.30 Reacquired 5,000 common shares for $1,800
The following financial information (in millions except for per share amounts) is for two major corporations for the three fiscal years ended October 31 as follows: Instructions a. Calculate the earnings per share, price-earnings ratio, and payout ratio for the common shareholders in each
P Salmon Limited reported profit of $465,325 for its November 30, 2024, year end. Cash dividends of $90,000 on the common shares and $65,000 on the noncumulative preferred shares were declared and paid during the year. The following information is available regarding Salmon’s common
Describe the two methods of preparing a statement of comprehensive income.
The shareholders’ equity accounts of Gualtieri Inc. on August 1, 2023, the beginning of its fiscal year, are as follows: $4 noncumulative preferred shares (25,000 issued) .............................$1,250,000 Common shares (350,000 issued)
Ruby Red Rental Corporation had the following balances in its shareholders’ equity accounts at January 1, 2024: Accumulated other comprehensive income (loss) ................................................ $ (25,000) Contributed surplus—reacquisition of common shares
Broadfoot Bakeries Inc. reported retained earnings of $394,000 on December 31, 2023. For the year ended December 31, 2024, the company had profit of $128,000, and it declared and paid dividends of $44,000. Assuming the company reports under ASPE, and referring to the data for Broadfoot Bakeries in
The shareholders’ equity accounts of Blue Bay Logistics Ltd. on April 1, 2023, the beginning of the fiscal year, are as follows: $6 cumulative preferred shares (20,000 issued) ...................................$1,800,000 Common shares (500,000 issued)
The shareholders’ equity accounts of Kanada Inc. at September 30, 2023, are as follows: Preferred shares, $5 noncumulative, unlimited number authorized, 6,000 issued .......... $465,000 Common shares, unlimited number authorized, 25,000 issued
On January 1, 2024, Marchelle Incorporated had an unlimited number of common shares authorized, 220,000 issued, and the balance in the Common Shares account was $2.2 million. The company reported a balance in Retained Earnings on this date of $850,000 and accumulated other comprehensive income of
On March 1, 2024, Broadfoot Bakeries Inc. discovered that the cost of Land purchased in 2023 was erroneously recorded as rent expense. The cost of the Land was $5,000. The company’s year end is December 31 and the income tax rate is 20%. Prepare the journal entry to correct this error.
The shareholders’ equity accounts of Tmao Inc. at December 31, 2023, are as follows: Preferred shares, $3 noncumulative, unlimited number authorized, 4,000 issued ......... $400,000 Common shares, unlimited number authorized, 160,000 issued .......................................
The adjusted trial balance for Aster Automobiles Inc. at December 31, 2024, is presented below. Aster’s income tax rate is 25% and journal entries for income tax expense have not yet been prepared. There were no common share transactions during the year.Instructions a. Prepare a statement of
Kettle Creek Corporation had the following transactions and events: 1. Declared a cash dividend. 2. Issued common shares for cash. 3. Completed a 2-for-1 stock split of the common shares. 4. Declared a stock dividend on the common shares. 5. Distributed the stock dividend
P The adjusted trial balance for Pansy Paints Ltd. at December 31, 2024, is presented below. Pansy’s income tax rate is 25% and journal entries for income tax expense have not yet been prepared. There were no common share transactions during the year.Instructions a. Prepare a statement of
What are discontinued operations? Why is it important to report discontinued operations separately from profit or loss from continuing operations?
For the year ended December 31, 2024, Jet Set Airlines reported profit of $920,000 and a holding gain on an equity investment of $66,000, before income tax. This gain is other comprehensive income. Jet Set has a tax rate of 30%. Prepare a statement of comprehensive income.
Describe intraperiod income tax allocation and why it is important.
The post-closing trial balance of Michaud Corporation at December 31, 2024, contains the following shareholders’ equity accounts: $4 cumulative preferred shares (15,000 shares issued) .............................$ 850,000 Common shares (250,000 shares issued)
On January 1, 2024, Fyre Lite Corporation had retained earnings of $650,000. During the year, Fyre Lite had the following selected transactions: 1. Declared and paid cash dividends, $245,000. 2. Earned profit before income tax, $750,000. 3. Corrected a prior period error of $85,000,
Refer to the data given for Olivier Corporation in BE14.6. Assume that the profit before income tax of $320,000 is from $500,000 of revenue and $180,000 of operating expenses. Prepare an income statement.Data from BE14.6.Olivier Corporation reported the following pre-tax amounts for the year ended
The post-closing trial balance of Jajoo Corporation at December 31, 2024, contains the following shareholders’ equity accounts: $5 noncumulative preferred shares (10,000 issued)..................................... $1,100,000 Common shares (400,000 issued)
The ledger of Weather Vane Limited at September 30, 2024, contains the following summary data:Cash dividends—common ................................................................ $ 150,000 Common shares
On July 9, 2024, Silver Fox Enterprises Inc. discovered it had recorded the $75,000 purchase of land as a legal expense on November 8, 2023. The company had reported retained earnings of $573,500 at its previous year end, December 31, 2023. During 2024, Silver Fox had profit of $193,000 and it
Olivier Corporation reported the following pre-tax amounts for the year ended August 31, 2024: profit before income tax (on the company’s continuing operations), $320,000; loss from discontinued operations, $85,000; and gain on disposal of assets of discontinued operations, $60,000. Olivier is
The ledger of Zug Limited at October 31, 2024, contains the following summary data: Cash dividends—common ........................................... .$ 120,000 Common shares .............................................................. 650,000 Depreciation expense
The ledger of Port Hope Corporation at November 30, 2024, contains the following summary data: Cash dividends—common ..................................................................................................... $ 65,000 Cash dividends—preferred
You have recently inherited $10,000 and you are considering investing in Canadian Tire Corporation, Limited’s common shares and you want to learn more about the company.Instructions Go to Canadian Tire’s website at http://corp.canadiantire.ca, click on “Investors,” and then click on
The ledger of Coquitlam Corporation at December 31, 2024, contains the following summary data: Cash dividends—common .......................................................................................................... $ 125,000 Cash dividends—preferred
On February 7, 2024, Flathead Corp. had a balance of $315,000 in its Common Shares account and the total number of shares issued was 25,000. On February 8, 2024, Flathead paid $10,000 to reacquire 1,000 shares. On December 22, 2024, the company paid $28,000 to reacquire 2,000 shares. (a)
Earnings per share is the most commonly cited financial ratio. Indeed, share prices rise and fall in reaction to a company’s earnings per share. The price-earnings ratio is also published in many newspapers’ stock market listings. Instructions Write a memo explaining why earnings per
Shrink Ltd. has profit from continuing operations of $320,000 for the year ended December 31, 2024. It also has the following before considering income tax: a net gain of $60,000 from the discontinuance of a component of the entity, which includes a $90,000 profit from the operation of the segment
The following shareholders’ equity accounts are reported by Talty Inc. on January 1: Common shares (unlimited authorized, 500,000 issued) ................................... ..................$4,000,000 Preferred shares ($9 noncumulative, convertible, 100,000 authorized, 4,000 issued)
On December 31, 2023, Liquorice Treats Limited reported 40,000 common shares issued and a balance in the Common Shares account of $250,000. On April 5, 2024, it reacquired 8,000 of these shares. This is the first time Liquorice Treats has reacquired any of its shares. Record the reacquisition of
Moosonee Ltd. had the following share transactions during its first year of operations: Jan. 6 Issued 200,000 common shares for $1.50 per share. 12 Issued 50,000 common shares for $1.75 per share. Mar. 17 Issued 1,000 preferred shares for $105 per share. July 18 Issued 1 million
The following is related to the shareholders’ equity of Adanac Limited on January 1: Common shares, 150,000 authorized, 14,000 shares issued ........................ $490,000 Contributed surplus—reacquisition of common shares ...................................
On December 31, 2023, LeBlanc Corporation, a public company, had the following shareholders’ equity accounts: Instructions a. Journalize the transactions and closing entries for 2024. b. Create general ledger accounts and enter the beginning balances from the December 31, 2023,
Contrast the effects of a cash dividend and stock dividend on a company’s(a) Assets, (b) Liabilities(c) Share capital(d) Retained earnings (e) Number of shares.
On December 31, 2023, Asaad Corporation, a public company, had the following shareholders’ equity accounts:During 2024, the following transactions occurred: Feb. 1 Declared a $1 cash dividend to shareholders of record on February 15 and payable on March 1. Apr. 1 Announced a 2-for-1
Loblaw Companies Limited is Canada’s food and pharmacy leader and the nation’s largest retailer. The company operates stores such as Real Canadian Superstore and Shoppers Drug Mart in communities across Canada. In 2020, Loblaw renewed its application to repurchase up to 17.9 million more common
Access the consolidated financial statements for Dollarama Inc. for the year ended January 31, 2021, from the company’s website or from SEDAR (www.sedar.com). Refer to these statements to answer the following questions. Instructions a. Did Dollarama report any of the following in fiscal
Smart Mart Inc. is considering one of three options: (1) Paying a $0.40 cash dividend, (2) Distributing a 5% stock dividend(3) Effecting a 2-for-1 stock split. The current fair value is $14 per share. Instructions In the chart below, indicate the financial impact on the
Before preparing financial statements for the current year, the chief accountant for Patel Ltd. provided the following information regarding the accounting for dividends and stock splits: 1. Patel has 20,000, $4 noncumulative preferred shares issued. It paid the preferred shareholders the
On March 1, Houseboat Ltd. had 400,000 common shares issued and the balance in its Common Shares account was $600,000. The company declared a 5% stock dividend to shareholders of record on March 14, to be distributed on March 31. The fair value per share was $5 on March 1, $4.85 on March 14, and
Two independent companies have the same annual earnings of $100,000; however, the companies have different amounts of shareholders’ equity. Average shareholders’ equity is $300,000 for company 1 and $350,000 for company 2. Which company would you consider a better investment and why?
For the year ended March 31, 2021, Saputo Inc. reported (in millions) revenue $14,293.9; profit $625.6; beginning shareholders’ equity $6,559.1; and ending shareholders’ equity $6,444.0. Calculate the return on equity.
True Green Nurseries Ltd. is a private company that follows ASPE. It is authorized to issue an unlimited number of both common and $6.50 cumulative preferred shares. On December 31, 2024, there were 15,000 common and 1,000 preferred shares issued with the following balances: Common Shares,
or the year ended December 31, 2024, Huron Lake Enterprises Ltd. had the following revenues and expenses: Sales, $745,000; Cost of Goods Sold, $450,000; Operating Expenses, $135,000; and Income Tax Expense, $35,000. The company also declared $25,000 of dividends to the common shareholders on
Nygren Corporation, a private company, is authorized to issue an unlimited number of common shares and 500,000, $5 cumulative preferred shares. It began operations on January 1, 2024, and the following transactions occurred in 2024: Jan. 1 Issued 6,000 common shares for $60,000 cash. 2
Annora Inc., a private company, is authorized to issue an unlimited number of common shares and 100,000 noncumulative $4 preferred shares. It began operations on January 1, 2024, and the following are selected transactions during 2024: Jan. 1 Issued 300,000 common shares for $150,000
A dividend is a “pro rata” distribution of retained earnings. Explain what “pro rata” means.
The following financial information (in millions) is for two major corporations for three fiscal years ended October 31: Instructions a. Calculate return on assets and return on equity for each company for 2020 and 2019. Comment on whether their ratios have improved or deteriorated.b.
Raiders Limited is a private company that follows ASPE. It is authorized to issue an unlimited number of both common and $5 cumulative preferred shares. On December 31, 2024, there were 35,000 common and 1,000 preferred shares issued. The common shares had been issued at an average per share amount
For the year ended December 31, 2024, Grayfair Inc. reported profit of $175,000. During the year, the company declared a total of $120,000 cash dividends and paid $85,000 of these dividends. Prepare a statement of retained earnings for the year, assuming the balance in Retained Earnings on December
Alverstone Inc. has the following shares outstanding: 54,000 common and 18,000 $0.75 cumulative preferred. On December 15, the directors declared dividends of $64,800 to the shareholders of record on December 28, payable January 10. Dividends had not been paid for the prior two years. (a)
Choke Cherry Ltd. is a private company reporting under ASPE. Its adjusted trial balance at its fiscal year end, December 31, 2024, is shown below: Instructions Prepare a multi-step income statement, statement of retained earnings, and balance sheet. Compare dividends paid to owners
Rupert Engineering Corp. is a private company reporting under ASPE. Its adjusted trial balance at its fiscal year end, March 31, 2024, is show Instructions Prepare a multi-step income statement, statement of retained earnings, and balance sheet. Are there any differences between the
Didsbury Digital Ltd. has a September 30 fiscal year end and a 15% income tax rate. The following information is available for its 2024 year end: 1. Earned $529,000 of service revenue and incurred $442,000 of operating expenses. Interest expense was $2,500. 2. On October 5, 2023, paid
On April 30, the directors of Three Rivers Corporation declared dividends of $0.75 per common share and directed that preferred dividends be paid as required to the shareholders of record on May 14, payable May 28. The company has 15,000 $0.80 preferred and 45,000 common shares issued. No dividends
Largent Corporation is authorized to issue 200,000, $4 cumulative preferred shares and an unlimited number of common shares. On January 1, 2024, the general ledger contained the following shareholders’ equity accounts: Preferred shares (8,000 shares
Cattrall Corporation is authorized to issue an unlimited number of $5 cumulative preferred shares and an unlimited number of common shares. On February 1, 2023, the general ledger contained the following shareholders’ equity accounts: Preferred shares (10,000 shares issued)
What factors help determine the market price of shares on an organized stock exchange?
Windswept Power Corporation issued 150,000, $4.50 cumulative preferred shares to fund its first investment in wind generators. In its first year of operations, it paid $450,000 of dividends to its preferred shareholders. In its second year, the company paid dividends of $900,000 to its preferred
On January 1, 2024, Conway Ltd. had the following shareholders’ equity accounts: Common shares, unlimited number of shares authorized, 1.5 million issued ............$1,650,000 Retained earnings
Refer to the information for Viceron Inc. and your answer in BE13.6. Prepare an income statement for Viceron Inc. for the year ended June 30, 2024.Data from Brief Exercise 13.6 For the year ended June 30, 2024, Viceron Inc. had service revenue of $800,000 and operating expenses of $575,000.
On January 1, 2024, Schipper Ltd. had the following shareholders’ equity accounts: Common shares (1,000,000 issued) ..............................................$1,500,000 Retained earnings ..............................................................................1,800,000 The
Accentrics Limited has the following information available regarding its share capital at December 31, 2023: Preferred shares, $3.50 cumulative, 20,000 shares issued.............................................. $1,000,000 Preferred shares, $4.50 noncumulative, 10,000 shares issued
For the year ended June 30, 2024, Viceron Inc. had service revenue of $800,000 and operating expenses of $575,000. The company has a 15% income tax rate. No income tax instalments have been paid or recorded. Prepare the journal entry to record income tax.
Paul Joyce purchases 100 common shares of TechTop Ltd. for $12 per share from the company’s initial public offering. Later, Paul purchases 200 more TechTop Ltd. common shares for $20 each on the Toronto Stock Exchange, using his own online brokerage account. Explain the impact of each of these
At the beginning of its first year of operations, Backwoods Limited has 3,000, $5 preferred shares and 50,000 common shares. Instructions Using the format shown below, allocate the total dividend paid in each year to the preferred and common shareholders, assuming that the preferred
As you learned in the “All About You” feature, possibly buying shares in publicly traded companies is one financial decision you’ll need to make when you graduate. Another decision about your finances is whether you’ll work for someone else or be self-employed. After you have completed your
At the beginning of its first year of operations, Northwoods Limited has 5,000, $4 preferred shares and 50,000 common shares. Instructions Using the format shown below, allocate the total dividend paid in each year to the preferred and common shareholders, assuming that the preferred
New Wave Pool Corporation is authorized to issue common and $3 convertible preferred shares. Each preferred share is convertible into four common shares. On July 2, the company issued 100,000 preferred shares for $110 per share. The common shares were trading at $25.00 on September 7, $27.50 on
Your cousin owns 100% of the common shares of a corporation, Ghost River Back Country Limited, a retail company specializing in outdoor clothing and equipment. The company has the opportunity to purchase land and a building in a desirable location that would be used to operate a second store. Your
Kari Corporation issued 5,000, $4 cumulative preferred shares at $80 each and 10,000 common shares at $18 each at the beginning of 2022. Each preferred share is convertible into four common shares. The appropriate preferred share dividend was declared and paid in 2022. During the years 2023 and
Pro Com Ltd. issued 8,000, $5 cumulative preferred shares at $66 each and 15,000 common shares at $30 each at the beginning of 2022. Each preferred share is convertible into two common shares. The appropriate preferred share dividend was declared and paid in 2022. During the years 2023 and 2024,
Loblaw Companies Limited, headquartered in Toronto, Ontario, is a large food and pharmacy retailer. Loblaw’s authorized share capital includes an unlimited number of common shares, 1 million first preferred shares, and an unlimited number of second preferred shares. As at January 2, 2021, no
Juke Joint Ltd., a private company, began operations on March 12 by issuing 5,000 common shares for $20 cash per share. On September 10, the company issued 500 common shares in exchange for equipment with an appraised value of $9,500. Assuming the company uses ASPE, prepare a journal entry to
(a) The following terms pertain to the forming of a corporation: (1) Articles of incorporation(2) Bylaws (3) Organization costs. Explain these terms. (b) Donna Fleming believes a corporation must be incorporated in the province in which its head office is located. Is this
Santiago Corp., a private corporation, received its articles of incorporation on January 3, 2024. It is authorized to issue an unlimited number of common shares and $1 preferred shares. It had the following share transactions during the year: Jan. 12 Issued 50,000 common shares for $5 per
Wetland Corporation, a private corporation, was organized on February 1, 2023. It is authorized to issue 100,000, $6 noncumulative preferred shares, and an unlimited number of common shares. The following transactions were completed during the first year: Feb. 10 Issued 80,000 common shares at
On August 5, Hansen Corporation issued 2,000 common shares for $12 per share. Prepare the journal entry for this transaction.
Match the statements in Column A with the appropriate term from Column B. Column A 1. 2. 3. 4. 5. 6. 7. 8. A company whose shares are not traded on an organized stock exchange like the TSX. Accounting standards that can be used by private companies. The characteristic that allows a corporation to
Patrick Sabine, a student, asks for your help in understanding the following characteristics of a corporation: (a) Limited liability of shareholders, (b) Transferable ownership rights(c) Ability to acquire capital. Explain these characteristics to Patrick.
Here are some of the terms discussed in the chapter: 1. Retained earnings 2. Issued shares3. Legal capital 4. Liquidation preference5. Authorized shares6. Public corporation7. Convertible 8. Retractable preferred shares 9. Cumulative 10. Initial public
Four independent situations follow: 1. Kevin Roberts, President and CEO of Hanley Tools Inc., has just been notified that his company has been sued due to the failure of one of its key products. Although the lawsuit is for several million dollars, Kevin is not concerned that he will have to
Presented below are four independent situations: 1. After passing their final accounting exam, four students put together plans to offer bookkeeping services to small companies. The students have signed an agreement that details how the profits of this new business will be shared. 2.
Corporations can be classified in different ways. For example, they may be classified by purpose (for example, profit or not-for-profit) or by ownership (for example, public or private). Explain the difference between these types of classifications.
The partners of LR Company have decided to liquidate their partnership. Noncash assets were sold for $125,000. The profit and loss ratios of the partners Chan, Jung, and Forren are 3:2:3, respectively. Complete the following schedule of cash payments for LR Company. AutoSave 08 X ✓
Hana has prepared the following list of statements about corporations: 1. A corporation is an entity separate and distinct from its owners. 2. As a legal entity, a corporation may buy, own, and sell property; borrow money; and enter into legally binding contracts.3. Shareholders have the
Ol Low, Arnt Olson, and Stig Lokum decided to liquidate the LOL partnership on December 31 of the current year, and go their separate ways. The partners share profit and losses equally. As at December 31, the partnership had cash of $15,000, noncash assets of $121,000, and liabilities of $22,000.
On November 15 of the current year, the account balances in Bluesky Partnership were Cash $11,000; Land $20,000; D. Black, Capital $15,000; V. Green, Capital $12,000; and B. Brown, Capital $4,000. The three partners share profit and losses equally. The land is sold for $14,000 cash. Prepare journal
Prior to the distribution of cash to the partners, the accounts in the VCP Partnership Company are as follows: Cash .......................................................................... $24,000 DR Vogel

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Accounting Principles Volume 2 9th Canadian Edition Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak - Solutions

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