Questions and Answers of Horngrens Accounting 11th Canadian

Recently, TransCanada Corporation paid cash dividends of $0.501 per share when the market price of the company’s shares was $61.04 per share. What was the dividend yield on TransCanada’s shares?
A summary of Pasmore Ltd.’s balance sheet appears as follows:Use the following ratio data to complete Pasmore Ltd.’s balance sheet:a. Current ratio is 0.70.b. Acid-test ratio is 0.30. PASMORE
Pria Developments Corp. is a Canadian real estate investment and development company looking to expand internationally. If growth in this market continues, they will need to make a one-time change to
What is an annual report? Briefly describe some of the information found in an annual report.
The records of Vintage Colour Engraving reveal the following:Compute net cash flows from operating activities by the indirect method for the year ended April 30, 2020. $36,000 Amortization expense.
Compute trend percentages for Ceder Inc.’s net sales and net income for the following five-year period, using 2016 as the base year:Which measure grew more during the period, net sales or net
Computer Doctor Ltd. has asked for your help in comparing the company’s profit performance and financial position with the computer services industry average. The manager has given you the
The 2020 comparative balance sheet and income statement of Shock Electricity Inc. follow:Shock Electricity had no non-cash investing and financing transactions during 2020. During the year, there
The 2020 income statement and comparative balance sheet of Mandarin Design Ltd. follow:Mandarin Design Ltd. had no non-cash financing and investing transactions during 2020. During the year, there
Brentwood Bay Inc.’s comparative balance sheet at September 30, 2020, and its 2020 income statement are shown below:Other information for the year ended September 30, 2020:a. Acquired equipment by
Gariepy Wholesale Ltd.’s comparative balance sheet at December 31, 2020, and its 2020 income statement are as follows:Other information for the year ended December 31, 2020:a. Acquired equipment by
Techno Toys Ltd. had the following comparative balance sheet:Compute the following:a. New borrowing or payment of long-term note payable, with Techno having only one long-term note payable
Hip Dance Academy Ltd.’s year-end is February 28. The accounting records at March 31, 2020, include the selected accounts shown below.Required1. Compute Hip Dance Academy Ltd.’s net cash inflow
To prepare the cash flow statement, accountants for West Boats Ltd. have summarized 2020 activity in two T-accounts as follows:West Boats Ltd.’s 2020 income statement and selected balance sheet
To prepare the cash flow statement, accountants for Craftique Inc. have summarized activity for the year 2020 in two accounts as follows:Craftique Inc.’s income statement and selected balance sheet
KS Media Corporation had the following income statement and balance sheet for 2020:
Asjid Analytics Ltd.’s accountants have developed the following data from the company’s accounting records for the year ended December 31, 2020:a. Salaries expense, $210,600.b. Cash payments to
Accountants for Grech Restaurant Supply Ltd. have developed the following data from the company’s accounting records for the year ended December 31, 2020:a. Credit sales, $291,950.b. Income tax
Which format of the cash flow statement gives a clearer description of the individual cash flows from operating activities? Which format better shows the relationship between net income and operating
Werstiner Corporation is preparing its cash flow statement by the indirect method. The company has the following items for you to consider in preparing the statement. Identify each item by where it
Sunshine Ice Cream Shops earned net income of $98,000, which included amortization of $16,500. Sunshine’s paid $132,000 for a building and borrowed $66,000 on a long-term note payable. How much did
Apple Distillery Inc. accountants have assembled the following data for the year ended June 30, 2020:Use the data in S17-6 (and your answer if you completed that question) to prepare Apple Distillery
The income statement of Flashpoint Consulting Ltd. is shown here:Additional data during fiscal year 2020 includes:a. Acquisition of computer equipment was $232,000. Of this amount, $202,000 was paid
Prepare the 2020 cash flow statement for Buragina Inc. using the indirect method to report cash flows from operating activities. Transaction data for 2020 Amortization expense $ 40,000 Payment of
Aggasiz Corporation earned net income of $90,000 and had amortization expense of $24,000. Also, non-cash current assets decreased by $18,000, and current liabilities decreased by $12,000. Using the
Graviton Medics Ltd. reports the following partial balance sheet information:Compute the following for Graviton Medics Ltd.:a. Collections from customers during fiscal 2020. Sales totalled
Napanee Resources Inc. has assembled the following data for the year ended June 30, 2020:Payment of dividends ............................................ $ 12,000Cash received from issuing shares
Use the information provided to prepare a cash flow statement for Northern Auto Repair Services using the direct method for December 31, 2020. Assume that the beginning balance of cash is $55,000.
Memmot Health Labs Inc. began 2020 with cash of $65,000. During the year, Memmot earned service revenue of $650,000 and collected $660,000 from customers. Expenses for the year totalled $470,000, of
Use the data in S17–15 (and your answer if you completed that question) to prepare Napanee Resources Inc.’s cash flow statement for the year ended June 30, 2020. Napanee uses the direct method
The income statement and additional data of Ahn Photography Ltd. follow:Additional data:a. Collections from clients are $3,500 more than revenues.b. Increase in cash balance, $5,000.c. Payments to
The accounting records of The Olive Oil Company reveal the following for the month ended August 31, 2020:RequiredCompute cash flows from operating activities by the direct method. Acquisition of
Selected accounts of Homestead Bakery Inc. show the following:RequiredFor each account, identify the item or items that should appear on a cash flow statement prepared by the direct method. Also,
The 2020 income statement and some additional data for Flashpoint Consulting Ltd. follow:Additional data:a. Collections from clients were $114,000 more than revenues.b. Increase in cash balance,
Winford Distributing Corp. collected cash of $102,000 from customers and $8,000 interest on notes receivable. Cash payments included $28,000 to employees, $18,000 to suppliers, $11,000 as dividends
Canyon Canoe Company’s comparative balance sheet is shown below. Amounts for 2024 are assumed, but include several transactions from prior chapters.Additional data follow:1. The income statement
Unbeweaveable Beauty Supply began 2020 with cash of $112,000. During the year, the company earned service revenue of $2,400,000 and collected $2,360,000 from clients. Expenses for the year totalled
Nelson Inc. recorded salaries expense of $54,000 during a year when the balance of Salaries Payable decreased from $8,000 to $2,000. How much cash did Nelson Inc. pay to employees during the year?
Nanotech Security Corp. is a company in British Columbia which specializes in globally recognized anti-counterfeiting products. Its consolidated cash flow statement for the years ended September 30,
Indigo Books & Music Inc.’s 2017 annual report included a Five Year Summary of Financial Information on page 60, with data for the fiscal years ended March 30, 2013, to April 1, 2017. Portions
Air Canada reported the following income statement information:Perform a horizontal analysis of net sales, cost of sales, and gross margin, both in dollar amounts and in percentages, for 2016 and
The president of Mackey Car Parts, Inc. has asked you to compare the company’s profit performance and financial position with the averages for the industry. The accounting office has given you the
Prepare a horizontal analysis of the comparative income statement of Bright Tutoring Inc. Round percentage changes to the nearest one-tenth percent. Why was the percentage increase in net income
Selected financial information for DMA Corp. for a six-year period follows:Required1. Prepare a horizontal analysis to compare 2020 to 2019. Round percentages to two decimal places. Which accounts
Selected financial information for Excelsior Limited for a six-year period follows:Required1. Prepare a horizontal analysis to compare 2020 to 2019. Round percentages to two decimal places. Which
Briefly describe horizontal analysis. How do decision makers use this analytical tool?
Air Canada reported the following net sales and net income amounts:1. Show Air Canada’s trend percentages for net sales and net income. Use 2014 as the base year. Round the results to the nearest
As requested by Purposeful Products Inc., perform a vertical analysis of its balance sheet. A C PURPOSEFUL PRODUCTS INC. Vertical Analysis of Balance Sheet December 31, 2020 1 2 Amount Percent 3
The Western Farm Supplies Inc. chief executive officer (CEO) has asked you to compare the company’s profit performance and financial position with the averages for the industry. The CEO has given
What is vertical analysis, and what is its purpose?
Use the following information to perform a vertical analysis and check if selling, general, and administrative (SG&A) expenses are in line with the industry average of 37 percent. Show all
Top managers of Tilt Windows Inc., a specialty fabricating company, have asked for your help in comparing the company’s profit performance and financial position with the average for the window
Prepare a comparative common-size income statement for Bright Tutoring Inc. using the 2020 and 2019 data found in E18–1. Round percentages to one-tenth of a percent.E18–1Prepare a horizontal
What is the purpose of common-size statements?
Financial statement data of Xi Supplies Inc. as at December 31, 2020, include the following items:Cash .................................................................................... $
Sporting Apparel Inc. reported the following amounts on its balance sheet at December 31, 2020: ........................................................................................ 2020Cash
On March 1, 2019, Brrr Inc. paid $1,000,000 to acquire a 35 percent investment in Mint Ltd. After one year, Mint Ltd. reported net income of $250,000 for the first year and declared and paid cash
Peanut Holdings Ltd. owns an 80 percent interest in Snoop Inc. Prepare a consolidation worksheet using the information below. Assume that the fair values of Snoop Inc.’s assets and liabilities are
Answer these questions about consolidation accounting:1. Define “parent company.” Define “subsidiary.”2. Which company’s name appears on the consolidated financial statements? How much of
G Holdings Ltd. has a large investment in corporate bonds. Suppose G Holdings Ltd. buys $6,000,000 of CN Railway bonds at a price of 98. The CN Railway bonds pay cash interest at the annual rate of
Where is non-controlling interest reported on the balance sheet?
Answer these questions about consolidated financial statements:1. Why does consolidated shareholders’ equity (contributed capital + retained earnings) exclude the equity of a subsidiary
On March 31, 2020, Kingpin Corp. paid 98.25 for 4 percent bonds of Claim Limited as an investment. The maturity value of the bonds is $100,000 at September 30, 2024; they pay interest on March 31 and
On May 1, 2020, Auto Corp. purchased a five-year, 4.5 percent bond. It intends to hold the bond until it matures. The market rate on the purchase date was 5.2 percent. Interest is paid annually each
How would you measure the net income of a parent company with three subsidiaries? Assume that two subsidiaries are wholly owned (100 percent) and that the parent owns 60 percent of the third
Heinz Ltd. owns vast amounts of corporate bonds. Suppose the company buys $1,000,000 of Kuzawa Corporation bonds on January 2, 2020, at a price of 97. The Kuzawa bonds pay cash interest at the annual
Return to S16–3, the Heinz Ltd. investment in Kuzawa Corporation bonds. Journalize the following transactions on Heinz Ltd.’s books, along with an explanation:1. Purchase of the bond investment
Suppose Zed Ltd. sells lumber to a British company on May 16. Zed agrees to accept 80,000 British pounds sterling. On the date of sale, the pound is quoted at $1.7831. Zed collects half the
Journalize the following foreign-currency transactions for Queensway Import Inc.:2020Nov. 17 Purchased goods on account from a Japanese company. The price was 500,000¥, and the exchange rate of the
On April 30, 2020, Cana Corp. paid 97.50 for 4 percent bonds of Starr Limited as an investment. Maturity value of the bonds is $100,000 at October 31, 2025; they pay interest on April 30 and October
Mentacos Inc. purchased inventory from a French company, agreeing to pay 150,000 euros. On the purchase date, the euro was quoted at $1.55. When Mentacos Inc. paid the debt, the price of a euro was
Shyster Originals Corp. purchased US$10,000 of American maple syrup to sell in Canada. At the time of the June 2 purchase, the exchange rate was 1.3504. When the payment was made on July 28, the
A credit purchase denominated in pesos, followed by weakness in the peso results in a foreign-currency gain or loss for a Canadian business?
Amber Wilson is pleased with the growth of the business and has decided to invest its temporary excess cash in a brokerage account. The company had the following securities transactions in 2024.Jul.
Kagit Inc. is a paper products company based just outside of Vancouver. Suppose Kagit’s financial statements reported the following items for affiliated companies whose shares Kagit owns in various
Your employer is looking to diversify into the baked goods industry. It is considering an investment in either Sweet Treats Ltd. or Cupcakes Inc. Both companies earn about the same net income and
When a Canadian business completes a credit sale denominated in pesos but then there is a weakness in the dollar, does this result in a foreign-currency gain or loss for the business?
Globex Travel Ltd. is experiencing a bad year. Net income is only $60,000. Also, two important clients are falling behind in their payments to Globex Travel Ltd., and the agency’s accounts
Managers of Sew It Seams Repairs are reviewing company performance for 2020. The income statement reports a 16 percent increase in net income, which is excellent. The balance sheet shows modest
Top managers of the Deli Llama Food Truck Ltd. are reviewing company performance for 2020. The income statement reports a 20 percent increase in net income over 2019. However, most of the net income
The 2020 comparative income statement and the 2020 comparative balance sheet of Eclipse Golf Inc. (shown below) have just been distributed at a meeting of the company’s board of directors.In
Use the Indigo Books & Music Inc.’s Consolidated Statements of Cash Flow which appear in Appendix A at the end of this book and on MyLab Accounting to answer the following questions:1. Which
What information does the cash flow statement report that is not shown on the balance sheet, the income statement, or the statement of retained earnings?
Brentwood Bay Inc.’s comparative balance sheet at September 30, 2020, is shown below:Other information for the year ended September 30, 2020 that may be needed includesa. Acquired equipment by
Gariepy Wholesale Ltd.’s comparative balance sheet at December 31, 2020, and its 2020 income statement are as follows:Other information for the year ended December 31, 2020 which may be useful
Use the TELUS Corporation’s Statements of Cash Flows found on MyLab Accounting to answer the following questions:1. Which method does TELUS use to report net cash flows from operations? How can you
Accountants for Nature’s Design Ltd. have assembled the following data for the year ended December 31, 2020:Transaction data for 2020:Required1. Prepare Nature’s Design Ltd.’s cash flow
GG’s Coffee Ltd.’s accountants have assembled the following data for the year ended December 31, 2020:Transaction data for 2020:Required1. Prepare GG’s Coffee Ltd.’s cash flow statement using
Latham Company expects the following for 2020:• Net cash inflow from operating activities of $120,000• Net cash inflow from financing activities of $48,000• Net cash outflow from investing
Refer to the data in E17–4 for Ontario Home Products Corporation. Which case indicates the best financial position? Give the reasons for your answer by analyzing each case.E17–4 Case A Case B
The financial statements for Zaibak Corp. for the year ended December 31, 2020, are as follows:Additional information:a. The administrative expenses included the following: Amortization expense
Vaughan Sales Corp. prepared the financial statements for the year ended December 31 shown below:Additional information:a. The administrative expenses included the following:Amortization expense on
Boost Plus Inc. reported the following data for 2020:Income StatementNet income .................................................... $63,000Amortization expense ....................................
The accounting records of TaiRong Corporation reveal the following at its year-end July 31, 2020:Required1. Compute cash flows from operating activities by the indirect method.2. Evaluate TaiRong
The 2020 comparative balance sheet and income statement of Shock Electricity Inc. follow:Shock Electricity had no non-cash investing and financing transactions during 2020. During the year, there
The 2020 income statement and comparative balance sheet of Mandarin Design Ltd. follow:Mandarin Design Ltd. had no non-cash financing and investing transactions during 2020. During the year, there
Markle Inc. paid $760,000 for a 35 percent investment in the common shares of Harry Systems Inc. For the first year, Harry Systems Inc. reported net income of $360,000 and at year-end declared and
Using the information from E16–6, calculate the balance in the Investment in Minecraft Ltd. Common Shares account. Assume that after all the above transactions took place, Kinross Gold Corp. sold
The balance sheet of Northern Developments Corp. at the start of the year included these balances:Assume the company completed the following investment transactions during 2020:Mar. 3 Purchased 8,000
What is the most important cash flow category on the cash flow statement for most successful companies?

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