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

Here are the basic elements of financial statements that we learned about in earlier chapters: 1. Assets 2. Liabilities 3. Equity 4. Revenues 5. Expenses Each statement that follows is an important aspect of an element’s definition. Match the elements with the
In 2024, Weisman Company had the following transactions related to the purchase of a property. All transactions are for cash unless otherwise stated.Feb. 7 Purchased real estate for $575,000, paying $115,000 cash and signing a note payable for the balance. The site had an old building on it and the
Kamloops Company is a grocery wholesaler and is planning to expand its operations. The company has asked the bank for a loan to finance the expansion. Alphonzo, the company’s manager, has prepared the preliminary financial statements. The preliminary financial statements for the year ended
P In its first year of business, Solinger Company purchased land, a building, and equipment on November 5, 2023, for $700,000 in total. The land was valued at $262,500, the building at $337,500, and the equipment at $150,000. Additional information on the depreciable assets
In 2024, Kadlec Company had the following transactions related to the purchase of a property. All transactions were for cash unless otherwise stated. Jan. 12 Purchased real estate for a future plant site for $420,000, paying $95,000 cash and signing a note payable for the balance. On the site,
Glans Company purchased equipment on account on April 6, 2022, at an invoice price of $442,000. On April 7, 2022, it paid $4,000 for delivery of the equipment. A one-year, $3,000 insurance policy on the equipment was purchased on April 9, 2022. On April 22, 2022, Glans paid $6,000 for installation
Payne Company purchased equipment on account on September 3, 2022, at an invoice price of $210,000. On September 4, 2022, it paid $4,400 for delivery of the equipment. A one-year, $1,975 insurance policy on the equipment was purchased on September 6, 2022. On September 20, 2022, Payne paid $5,600
Sugden Company has a December 31 fiscal year end and follows IFRS. The following selected transactions are related to its property, plant, and equipment in 2024: Jan. 22 Performed an annual safety inspection on the equipment for $4,600. Apr. 10 Installed a conveyor belt system in the
Refer to the data given for Surkis Company in BE9.5. Assume instead that the company uses the diminishing-balance method and that the diminishing-balance depreciation rate is double the straight-line rate. Calculate the depreciation expense for each year of the equipment’s life.Data from Brief
Natalie is thinking of buying a van that will be used only for business. She estimates that she can buy the van for $28,400. Natalie would spend an additional $3,000 to have the van painted. As well, she wants the back seat of the van removed so that she will have lots of room to transport her
Slope Style Snowboarding Company, a public company, purchased equipment on January 10, 2020, for $750,000. At that time, management estimated that the equipment would have a useful life of 10 years and a residual value of $50,000. Slope Style uses the straight-line method of depreciation and has a
SE Parts Supply Company purchased an industrial robot on July 1, 2022, for $395,000. It paid $100,000 in cash and signed a 5% note payable for the balance. The industrial robot was estimated to have a 20-year useful life with a $15,000 residual value. The company has a December 31 year end and
Rottino Company purchased a new machine on October 1, 2024, at a cost of $150,000. The company estimated that the machine will have a residual value of $12,000. The machine is expected to be used for 10,000 working hours during its five-year life. Rottino Company’s year-end is December
NW Tool Supply Company purchased land and a building on April 1, 2022, for $385,000. The company paid $115,000 in cash and signed a 5% note payable for the balance. At that time, it was estimated that the land was worth $150,000 and the building, $235,000. The building was estimated to have a
At January 1, 2024, Hamsmith Corporation, a public company, reported the following property, plant, and equipment accounts Hamsmith uses straight-line depreciation for buildings and equipment and its fiscal year end is December 31. The buildings are estimated to have a 50-year useful life and
On January 3, 2023, Ajax Argyle purchased a piece of equipment for $125,000. The equipment’s estimated useful life is either four years or 12,000 units, with a residual value of $18,000. The company has a December 31 fiscal year end and normally uses straight-line depreciation. Management is
Lindy Weink, the new controller of Lafrenière Company, has reviewed the expected useful lives and residual values of selected depreciable assets at December 31, 2024. (Depreciation for 2024 has not been recorded yet.) Her findings are as follows: After discussion, management agrees to accept
On December 27, 2021, Wolcott Windows purchased a piece of equipment for $107,500. The estimated useful life of the equipment is either four years or 60,000 units, with a residual value of $10,500. The company has a December 31 fiscal year end and normally uses straight-line depreciation.
Express Co. purchased equipment on March 1, 2022, for $95,000 on account. The equipment had an estimated useful life of five years, with a residual value of $5,000. The equipment is disposed of on February 1, 2025. Express Co. uses the diminishing-balance method of depreciation with a 20% rate and
At January 1, 2024, Jaina Company, a public company, reported the following property, plant, and equipment accounts: a. Jaina uses straight-line depreciation for buildings and equipment, and its fiscal year end is December 31. The buildings are estimated to have a 50-year life and no residual
Walker Co. purchased furniture on February 4, 2022, for $70,000 on account. At that time, it was expected to have a useful life of five years and a $1,000 residual value. The furniture was disposed of on January 26, 2025, when the company moved to new premises. Walker Co. uses the diminishing
The intangible assets and goodwill reported by Ip Company at December 31, 2023, follow: Patent #1 was acquired in January 2022 and has an estimated useful life of 10 years. Copyright #1 was acquired in January 2018 and also has an estimated useful life of 10 years. The following cash
The intangible assets and goodwill section of Ghani Corporation’s balance sheet at December 31, 2023, is as follows: The copyright was acquired in January 2022 and has an estimated useful life of three years. The trademark was acquired in January 2017 and is expected to have an indefinite
Due to rapid turnover in the accounting department, the following transactions involving intangible assets were improperly recorded by Riley Co. in the year ended December 31, 2024: 1. Riley developed a new manufacturing process early in the year, incurring research and development costs of
The unadjusted trial balance of LeBrun Company at its year end, July 31, 2024, is as follows: Adjustment information: 1. The July 31 bank statement reported debit memos for service charges of $50 and a $650 NSF (not sufficient funds) cheque that had been received from a customer for the
Due to rapid employee turnover in the accounting department, the following transactions involving intangible assets were recorded in a questionable way by Hahn Company in the year ended August 31, 2024: 1. Hahn developed an electronic monitoring device for running shoes. It incurred research
Refer to the financial statements of Aritzia Inc. and the Notes to the Financial Statements in Appendix A. Instructions Answer the following questions about the company’s current and contingent liabilities: a. What were Aritzia’s total current liabilities at March 1, 2020? What
Motzer Company had the following selected transactions. Feb. 2 Purchases supplies from Supplies R Us on account for $2,500. 10 Cash register sales total $43,200, plus 5% GST and 7% PST. Ignore any cost of goods sold entry. 15 Signs a $35,000, six-month, 6%-interest-bearing note
Peter’s Mini Putt was opened on March 1 by Peter Palazzi. The following selected transactions occurred during March: Mar. 1 Purchased golf balls and other supplies for $550 from Stevenson Supplies payable in 30 days. 5 Received a booking for a birthday party to be held the following
The current liabilities section of the December 31, 2023, balance sheet of Livestream Company included notes payable of $14,000 and interest payable of $490. The note payable was issued to Tanner Company on June 30, 2023. Interest of 7% is payable at maturity, March 31, 2024. The following
MileHi Mountain Bikes markets mountain-bike tours to clients vacationing in various locations in the mountains of British Columbia. The current liabilities section of the October 31, 2023, balance sheet included notes payable of $15,000 and interest payable of $375 related to a six-month, 6% note
Scoot Scooters has four employees who are paid on an hourly basis, plus time and a half for hours in excess of 40 hours a week. Payroll data for the week ended February 17 follow: Instructions a. Prepare a payroll register for the weekly payroll. b. Record the payroll on February 17
On January 31,Cardston Company had the following payroll liability accounts in its ledgerIn February, the following transactions occurred: Feb. 4 Sent a cheque to the union treasurer for union dues. 7 Sent a cheque to the insurance company for the disability and life insurance. 13
In the “All About You” feature, you learned who is responsible for remitting income tax, CPP, and EI to the Canada Revenue Agency (CRA) if you are an employee or self-employed. You also learned that the CRA has strict guidelines as to whether someone is self-employed or an employee. Assume that
Sure Value Hardware has four employees who are paid on an hourly basis, plus time and a half for hours worked in excess of 40 hours a week. Payroll data for the week ended March 14, follow: Instructions a. Prepare a payroll register for the weekly payroll. b. Record the payroll on
On March 31, Babb Company had the following payroll liability accounts in its ledger:In April, the following transactions occurred: Apr. 4 Sent a cheque to the union treasurer for union dues. 7 Sent a cheque to the insurance company for the disability and life insurance. 13 Issued a
Johan Company and Nordlund Company are competing businesses that follow ASPE. Both began operations six years ago and they are quite similar. The current balance sheet data for the two companies are as follows:You have been hired as a consultant to do a review of the two companies. Your goal is to
Seaboard Company receives its annual property tax bill of $24,000 for the 2024 calendar year on May 31, 2024, and it is payable on July 31, 2024. Seaboard has a December 31 fiscal year end. Instructions a. Prepare the journal entries for Seaboard on May 31, July 31, and December 31, 2024,
Suncor Energy Inc. reported the following current assets and current liabilities (in millions) at December 31, 2019:Accounts payable and accrued liabilities................................... $6,555Accounts receivable ......................................................................
Cecilia Hernandez earned $60,100 in 2021 and was paid monthly. She worked for HillSide Tours for all of 2021. Using the formulas, what were her CPP and EI deductions in (a) January 2021 and (b) December 2021?
In 2021, Viktor Petska was paid a gross salary of $1,000 on a weekly basis. For the week ended May 17, 2021: (a) Calculate his CPP and EI deductions.(b) Use the excerpts in Illustration 10A.5 to determine his income tax deductions assuming Viktor works in Ontario and his TD1 claim code is 1.
Describe the conceptual framework of accounting and explain how it helps financial reporting.
Indicate which of the following statements are true or false.a. ______ The conceptual framework includes recommendations on how to analyze financial statements. b. ______ The conceptual framework identifies the objective of financial reporting. c. ______ The conceptual framework is a
Eugene Company is a small private company that sells computers and provides consulting services. The owner of the company, Eugene, wants to expand and has asked you to become his business partner. Eugene has prepared financial statements for the year ended December 31, 2024. These financial
On January 1, 2024, Shumway Software Company’s general ledger contained these liability accounts: Accounts payable …………………………………………………………… $40,000 Unearned revenue—loyalty program……………………………… . 3,700CPP
Brilliance Holiday Light Services offers commercial and residential lighting services for the holiday season. Brilliance charges a standard rate of $100 per hour. The company also offers a wide variety of holiday lights for purchase separately. In November and December 2024, Brilliance offers
McCain Foods Limited is a large multinational private company with sales in excess of $10 billion. It produces both frozen and non-frozen food products and is the world’s largest manufacturer of frozen potato products. It has manufacturing operations on six continents and sales operations in over
Presented below are selected qualitative characteristics of financial information. 1. Relevance 2. Neutrality 3. Verifiability 4. Timeliness Instructions 5. Faithful representation 6. Comparability 7. Understandability For each of the following situations,
Satterfield publishes a monthly sports magazine, Hockey Hits. Subscriptions to the magazine cost $18 per year. During November 2024, Satterfield sells 15,000 subscriptions beginning with the December issue. Satterfield prepares financial statements quarterly and recognizes revenue for magazines
Short Track Speed Skating, a public company, purchased equipment on January 10, 2020, for $600,000. At that time, management estimated that the equipment would have a useful life of 10 years and a residual value of $25,000. Short Track uses the straight-line method of depreciation and has a
On January 2, 2024, Evers Company purchased the following two machines for use in its production process. Machine A: The cash price of this machine was $48,000. Related expenditures also paid in cash included provincial sales tax $1,700, shipping costs $150, insurance during shipping $80,
In the “All About You” feature, you learned about actions that were taken to strengthen Canada’s copyright law and the radical changes in technology that drove the need to update the law. You have recently graduated from a music program and have composed two songs that you believe a recording
Surkis Company acquires equipment at a cost of $42,000 on January 3, 2024. Management estimates the equipment will have a residual value of $6,000 at the end of its four-year useful life. Assume the company uses the straight-line method of depreciation. Calculate the depreciation expense for each
On January 1, 2024, Sigma Company purchased the following two computer servers for use in its operations Rack Server: The cash price of this server was $52,000. Related expenditures also paid in cash included provincial sales tax $6,240, shipping costs $85, insurance during shipping $50, and
Arnison Company has a December 31 fiscal year end and follows ASPE. The following selected transactions are related to its property, plant, and equipment in 2024:Jan. 12 All of the company’s light bulbs were converted to energy-efficient bulbs for $2,200. Arnison expects that this will save money
Long Trucking Corporation is a medium-sized trucking comIn the “All About You” feature, you learned about actions that were taken to strengthen Canada’s copyright law and the radical changes in technology that drove the need to update the law. You have recently graduated from a music program
In its first year of business, ChalkBoard purchased land, a building, and equipment on March 5, 2023, for $650,000 in total. The land was valued at $275,000, the building at $343,750, and the equipment at $68,750. Additional information on the depreciable assets follows: Instructions a.
Refer to the financial statements and the Notes to Consolidated Statements for Aritzia Inc., which are reproduced in Appendix A. Instructions a. For each type of property and equipment that Aritzia reports in note 6 to its consolidated statement of financial position, identify the
Pandora Pants Company acquires a delivery truck on April 6, 2024, at a cost of $38,000. The truck is expected to have a residual value of $6,000 at the end of its four-year life. Pandora uses the nearest month method to pro-rate depreciation expense. Calculate annual depreciation expense for the
Cypress Timber Company has a December 31 fiscal year end. The following information is related to its Westerlund tract of timber land: 1. Cypress purchased a 50,000-hectare tract of timber land at Westerlund on June 7, 2023, for $50 million, paying $10 million cash and signing a 7% note
On January 1, 2024, the ledger of Accardo Company contains the following liability accounts. Accounts Payable
Caribou County Service Station started a customer loyalty program at the beginning of 2023 in which customers making cash purchases of gasoline at the gas bar are issued rewards in the form of coupons. For each litre of gasoline purchased, the customer gets a coupon for 2.5 cents that can be
One-Stop Department Store has a loyalty program where customers are given OneStop “Money” for cash or debit card purchases. The amount they receive is equal to 2% of the pre-tax sales total. Customers can use the One-Stop Money to pay for part or all of their next purchase at OneStop
Big Fork Company, a private company that follows ASPE, is preparing its financial statements for the year ended December 31, 2024. It is now February 15, 2025, and the following situations are being reviewed to determine the appropriate accounting treatment: 1. Big Fork is being sued for $3
Charleswood Musical Theatre’s season begins in November and ends in April, with a different play each month. In October 2024, Charleswood sold 100 season tickets for the 2024–25 season, for $210 each. Charleswood records all season ticket sales as unearned revenue and adjusts its accounts on a
Mega Company, a public company, is preparing its financial statements for the year ended December 31, 2024. It is now January 31, 2025, and the following situations are being reviewed to determine the appropriate accounting treatment: 1. Mega Company is being sued for $4 million for a possible
In 2024, Song Company introduces a new product that includes a two-year warranty on parts. During 2024, 4,400 units are sold for $450 each. The cost of each unit was $175. The company estimates that 5% of the units will be defective and that the average warranty cost will be $85 per unit. The
Marshall rings up sales plus sales taxes on its cash register. September 5, the register total for sales is $120,000. Instructions Journalize the transactions assuming the sales were made in a. Quebec b. New Brunswick c. Alberta d. British Columbia
Save-Always Stores started a customer loyalty program at the beginning of 2023 in which customers making cash purchases of gasoline at Save-Always Gas Bars are issued rewards in the form of grocery coupons. For each litre of gasoline purchased, the customer gets a grocery coupon for 3.8 cents that
Dresner Company has a December 31 fiscal year end. It receives a $9,600 property tax bill for the 2024 calendar year on March 31, 2024. The bill is payable on June 30. Prepare entries for March 31, June 30, and December 31, assuming the company adjusts its accounts annually.
Your roommate says, “Sales taxes are reported as an expense in the income statement.” Do you agree? Explain.
What is a certain liability? List some examples.
Vacation Villas had the following selected transactions. Feb. 1 Signs a $30,000, eight-month, 5%-interest-bearing note payable to CountryBank and receives $30,000 in cash. 8 Sales on account of $14,500, plus 13% HST. Ignore any cost of goods sold entry. 14 The payroll for the
The Brampton Bullet hockey team sold 2,000 tickets at $120 each for its six-game home schedule. Prepare the entry to record (a) The sale of the season’s tickets and (b) The revenue recognized upon playing the first home game.
Loblaw Companies Limited (which owns Shoppers Drug Mart) reported the following information about contingencies in the notes (partial) to its December 28, 2019, financial statements: Instructions Why would Loblaw disclose information about a legal dispute, but not include the amount of
On January 1, 2024, the ledger of Edmiston Software Company contains the following liability accounts: Accounts Payable ..................................... $42,500 GST Payable ................................................5,800 Unearned Revenue
In providing accounting services to small businesses, you encounter the following independent situations: 1. Sainsbury rang up $13,200 of sales, plus HST of 13%, on its cash register on April 10. 2. Montgomery rang up $30,000 of sales, before sales taxes, on its cash register on April 21.
On January 1, 2022, Logue Company began a warranty program to stimulate sales. It is estimated that 5% of the units sold will be returned for repair at an estimated cost of $25 per unit. Sales and warranty figures for the three years ended December 31 are as follows: Instructions a.
On January 1, 2022, Hopewell Company began a warranty program to stimulate sales. It is estimated that 5% of the units sold will be returned for repair at an estimated cost of $30 per unit. Sales and warranty figures for the three years ended December 31 are as follows: Instructions a.
Natalie has had much success with her smoothies business over the past number of months. Some customers have shown an interest in purchasing gift certificates from Natalie. Natalie is considering a gift certificate that would include a recipe book and all of the supplies needed to create two
Backyard Shed Solutions sells its largest shed for $1,800 plus HST of 13%. On May 10, 2024, it sold 40 of these sheds. On May 17, 2024, the company sold 95 of these sheds. All sales are cash sales. For each day’s sales, (a) Calculate the HST and (b) Prepare a journal entry to record the
On January 1, 2024, Zaur Company’s general ledger had these liability accounts: Accounts payable ....................................................... $63,700 Unearned revenue—loyalty program ..........................2,150 CPP payable
Satterfield publishes a monthly music magazine, DiscOver. Subscriptions to the magazine cost $18 per year. During November 2024, Satterfield sells 15,000 subscriptions beginning with the December issue. Satterfield prepares financial statements quarterly and recognizes subscription revenue on
Udala Uke’s had the following transactions involving notes payable. July 1, 2024 Borrows $50,000 from First National Bank by signing a nine-month, 8% note. Nov. 1, 2024 Borrows $60,000 from Interprovincial Bank by signing a three-month, 6% note. Dec. 31, 2024 Prepares annual
Green Apple Tree Farm has a December 31 fiscal year end. The company has six notes payable outstanding on December 31, 2024, as follows: 1. A 10-month, 5%, $50,000 note payable issued on August 1, 2024. Interest is payable monthly on the first day of each month starting on September 1. 2.
Rabbitt Enterprises borrows $60,000 from LowLand Trust Co. on July 1, 2024, signing a 4%, one-year note payable. Interest is to be paid at maturity. Prepare journal entries for Rabbitt Enterprises to record: (a) The receipt of the proceeds of the note; (b) The accrued interest at December
The Calgary Panthers sold 5,000 season football tickets at $80 each for the six-game home schedule. What entries should be made (a) When the tickets were sold and (b) After each game?
Juniper Bush Farm has a December 31 fiscal year end. The company has six notes payable outstanding on December 31, 2024, as follows: 1. A nine-month, 5%, $25,000 note payable issued on July 1, 2024. Interest is payable monthly on the first day of each month starting on August 1. 2. A
The Show Time movie theatre sells thousands of gift certificates every year. The certificates can be redeemed at any time because they have no expiry date. Some of them may never be redeemed (because they are lost or forgotten, for example). The owner of the theatre has raised some questions about
Blue Robin Retail has one store in Ottawa and one in Regina. All sales in Ontario are subject to 13% HST; all sales in Saskatchewan are subject to 5% GST and 6% PST. On March 12, 2024, the Ottawa store reports cash sales of $7,200 and the Regina store reports cash sales of $8,400. (a)
Slovak Plumbing Company pays its support staff weekly and its plumbers on a semimonthly basis. The following support staff payroll information is available for the week ended May 14, 2021: The plumbers’ salaries are based on their experience in the field, as well as the number of years they
Western Electric Company pays its support staff weekly and its electricians on a semimonthly basis. The following support staff payroll information is available for the week ended June 11, The electricians’ salaries are based on their experience in the field, as well as the number of years
The following selected account balances are from Creative Carpentry’s adjusted trial balance at March 31, 2024: Accounts payable ........................................................... $ 60,000 Accounts receivable
Gametime Inc. began selling game consoles on November 1, 2024. The company offers a 60-day warranty for defective merchandise. Based on past experience with other similar products, Gametime estimates that 3.0% of the units sold will become defective in the warranty period, and that the average
For each of the following independent situations, indicate whether it should be (1) Recorded, (2) Disclosed, or (3) Neither recorded nor disclosed. Explain your reasoning and indicate if the accounting treatment would be the same or different under IFRS and ASPE. a. A customer
AP Torstar Corporation is a media company that publishes newspapers and digital media. The company reports the following current assets and current liabilities at December 31, 2019 (in thousands).Accounts payable and accrued liabilities
BCE Inc., whose offerings include Bell Canada, reports the following current assets and current liabilities at December 31, 2019 (in millions of dollars): Cash $ ......................................................................................141 Cash equivalents
What are the differences between certain, estimated, and contingent liabilities?
Steig’s Sports Store has a customer loyalty program in which it issues points to customers for every cash purchase that can be applied to future purchases. For every dollar spent, a customer receives three points. Each point is worth one cent. There is no expiry date on the points. Steig’s
Ahmad Company has the following data for the weekly payroll ended May 31:Employees are paid 1.5 times the regular hourly rate for all hours worked over 40 hours per week. Ahmad Company must make payments to the workers’ compensation plan equal to 2% of the gross payroll. In addition, Ahmad

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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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