Questions and Answers of Horngrens Accounting 11th Canadian

Which of the following amounts are reported on the cash flow statement? Indicate the section where they are reported.July 1 and July 15 were cash transactions.August 1 was a purchase with a long-term
Suppose Custom Ice Cream Corporation completed the following transactions:2020Dec. 4 Sold product on account to a Mexican company for $110,000. The exchange rate of the Mexican peso was $0.078, and
Apple Distillery Inc. accountants have assembled the following data for the year ended June 30, 2020:Prepare the operating activities section of Apple Distillery Inc.’s cash flow statement for the
Prepare the operating section of Preston Media Corporation’s 2020 cash flow statement using the indirect method.Use the comparative balance sheet provided and the following selected fiscal 2020
Innisfil Ice Hunt Rentals Inc. reported a net cash flow from operating activities of $40,625 on its cash flow statement for the year ended December 31, 2020. The following information was reported in
Sawyer Products Ltd.’s accountants have developed the following data from the company’s accounting records for the year ended July 31, 2020:a. Salaries expense, $631,800.b. Cash payments to
Accountants for Direct Builders’ Supply Ltd. have developed the following data from the company’s accounting records for the year ended April 30, 2020:a. Credit sales, $728,125.b. Income tax
Freedom Electronics Inc. completed the following transactions:2020Dec. 1 Sold machinery on account to a Japanese company for $45,000. The exchange rate of the Japanese yen is $0.0113, and the
On January 6, 2020, Ling Corp. paid $5,000,000 for its 40 percent investment in True World Inc. Assume that on December 31 that same year, True World earned net income of $1,800,000 and paid cash
Portal Holdings Ltd. had the following short-term investments in marketable securities on December 31, 2019, at fair value and book value:Canadian Utilities Limited .......................
Sparta Investments Ltd. had the following short-term investments in marketable securities at fair value at December 31, 2019:Alberta Energy Co. ............................... $310,000Finning Ltd.
Pisa Inc. paid $1,040,000 to acquire all the common shares of Sienna Ltd., and Sienna Ltd. owes Pisa Inc. $120,000 on a note payable. The fair market value of Sienna’s net assets equalled the book
Marsland Inc. completed these long-term investment transactions during 2020. Disregard commissions.Jan. 14 Purchased 1,000 shares of Crew Ltd., paying $41.00 per share.Aug. 22 Received a cash
Use the data given in S16–7. On August 4, 2021, Marsland Inc. sold its investment in Crew Ltd. for $54.00 per share.1. Journalize the sale, excluding any brokerage commission expense. No
On December 31, 2020, when the market interest rate is 6 percent, Elle Corporation purchases $5,000,000 of Belmont Products Inc.’s six-year, 5.5 percent bonds at issuance for $4,875,575. Interest
On July 18, 2020, Patrone Holdings Ltd. paid $1,920,000 to purchase 90 percent of the common shares of Smirnoff Inc., and Smirnoff Inc. owes Patrone Holdings Ltd. $240,000 on a note payable. All
On December 31, 2020, when the market interest rate is 6 percent, an investor purchases $700,000 of Solar Ltd. 10-year, 5 percent bonds at issuance for $647,929. Interest is paid semi-annually.
Pisa Inc. paid $1,040,000 to acquire all the common shares of Sienna Ltd., and Sienna Ltd. owes Pisa Inc. $120,000 on a note payable. The fair market value of Sienna’s net assets equalled the book
Financial institutions such as insurance companies and pension plans hold large quantities of bond investments. Suppose Meridian Credit Union purchases $2,000,000 of 3.0 percent bonds of the Province
Financial institutions such as insurance companies and pension plans hold large quantities of bond investments. Suppose Sun Life Insurance Company purchases $1,000,000 of 3.00 percent bonds of
Kinross Gold Corp. paid $12,000,000 to acquire a 40 percent investment in Minecraft Ltd. Further, assume Minecraft Ltd. reported net income of $1,780,000 for the first year and declared and paid cash
At what amount should the following investment portfolio be reported on the December 31 year-end balance sheet? All the investments are less than 5 percent of the investee’s shares. Prepare one
Pluto Corp. paid $750,000 to acquire all the common shares of Saturn Inc., and Saturn Inc. owes Pluto Corp. $170,000 on a note payable. The fair market value of Saturn Inc.’s net assets equalled
What is an equity investment?
Soochow Corp. has a new accounting co-op student who heard that the accounting for equity investments changes with the amount of shares held. The student needs to know the accounting differences
Suppose Ryerson Corp. completed the following investment transactions in 2020 and 2021:2020Nov. 6 Purchased 2,000 McGill Corporation common shares for $60,000. Ryerson plans to sell the shares in the
All Corp. completed the following investment transactions during 2019 and 2020:2019Dec. 12 Purchased 1,500 shares of Blackmore Ltd. at a price of $62.00 per share, intending to sell the investment
Give an example of two debt instruments.
The TELUS Corporation December 31, 2016, financial statements appear on MyLab Accounting. Access them to answer the following questions.Required1. What information can you find about TELUS
FT Corporation reported the following amounts on its balance sheet at the start of the year:Short-term investments .................................................. $ 104,000Investments—Associated
Shopify Inc. reported the following (adapted) information in its 2016 balance sheet:Current assets ..................................... (in thousands of US dollars)Cash and cash equivalents
Journalize Consumer Evaluation Ltd.’s investment transactions. Explanations are not required.2019Dec. 6 Purchased 1,000 shares of Georgian Reports Inc. at a price of $41.00 per share, intending to
Indigo Books & Music Inc.’s (Indigo’s) financial statements appear in Appendix A at the end of this book and on MyLab Accounting. Required1. The financial statements are labelled
Margaret Joyce is the owner of Trickle Music Holdings Ltd., a newly formed company whose year-end is December 31. The company made two investments during the first week of January 2020. Both
Beauchesne Insurance Ltd. owns numerous investments in the shares of other companies. Assume Beauchesne Insurance Ltd. completed the following investment transactions:2020Jan. 1 Purchased 30,000
Oliver Corp. owns numerous investments in the shares of other companies. Assume Oliver Corp. completed the following investment transactions: 2020Jan. 1 Purchased 12,000 common shares (total
Journalize the following investment transactions of Russell Corp.:2020Nov. 6 Purchased 1,200 common shares of Aveda Corporation at $78.00 per share, with brokerage commission of $500. The shares will
If a company buys the shares of another company as an investment, what is the investor’s cost of 200 Shopify Inc. common shares at $101.50 with a brokerage commission of $75?
The (partial) advertisement below appeared in a newspaper:Interest is payable on November 16 and May 16.RequiredAnswer these questions about Millar Corporation’s secured debentures (bonds):1.
This exercise continues recordkeeping for the Canyon Canoe Company. Students do not have to complete prior exercises in order to answer this question.Canyon Canoe Company is considering raising
Booth Ice Huts Inc. includes the following selected accounts in its general ledger at December 31, 2020:Bonds
You qualified for a student loan in the amount of $10,000. Once you graduate, you are required to repay this loan over 10 years at a rate of interest of 4 percent. The monthly interest and principal
Healthcare Providers Ltd. issued $7,500,000 of 8.5 percent, 15-year convertible bonds payable on July 1, 2020, at a price of 97.0. Each $1,000 face amount of bonds is convertible into 80 common
Saint Martin Inc. issued $300,000 of 12 percent, 10-year bonds on July 1, 2019. Interest payments dates are January 2 and July 1. The issue price was $293,400. The bonds are convertible into common
Suppose Zen Corporation has net income of $600,000 and 200,000 common shares outstanding before a new project. The company needs $1,000,000 for expansion, and management is considering two financing
What are blended mortgage payments?
On September 30, 2020, when the market interest rate is 6 percent, Jammer Ltd. issues $8,000,000 of 8 percent, 20-year bonds for $9,849,182. The bonds pay interest on March 31 and September
Assume that the notes to Echo Valley Ltd.’s financial statements reported the following data about their $2,000,000 debentures on September 30, 2020: NOTE E: LONG-TERM DEBT5 percent debentures
A lease agreement for equipment requires Granger Transport Ltd. to make 10 annual payments of $40,000, with the first payment due on January 2, 2020, the date of the inception of the lease.Required1.
The chief accounting officer of Giffen Productions Ltd. is considering how to report long-term notes at March 31, 2020. The company’s financial accountant has assembled the following information
Briefly answer the following questions:a. When accounting for bonds, what is the primary difference between ASPE and IFRS?b. When accounting for leases, what is the primary difference between ASPE
Spirit World Corp. borrowed $500,000 in the form of a mortgage on January 1, 2020, to finance the purchase of a small warehouse. The mortgage rate is 5 percent, the term is 20 years, and semi-annual
Cotton Corp. agrees to lease a store in a mall and open a t-shirt shop. On January 2, 2020, the company pays a nonrefundable $20,000 deposit to secure the store and agrees to a lease amount of
Knutsen Financial Services Ltd. needs to raise $3,000,000 to expand company operations.Knutsen’s president is considering two options:• Plan A: $3,000,000 of 4 percent bonds payable to borrow the
On January 1, 2020, Thames Company purchases a vehicle and signs a six-year loan for $60,000 at 4 percent. Their accountant started the following table:a. Complete the partial amortization schedule
The accounting records of Arthur Curry Associates Inc. include the following items:RequiredShow how these items would be reported on the Arthur Curry Associates Inc. balance sheet, including headings
Pasteis Ltd. reported the following balances at September 30, 2020:Long-term liabilitiesConvertible bonds payable, 9%, due September 30, 2026 .................... $1,600,000Discount on bonds payable
Domaine Wines Ltd. issued an $800,000, five-year, 6 percent mortgage note payable on December 31, 2020, to help finance a new warehouse. The terms of the mortgage provide for semi-annual blended
Pudong Transport Ltd. is considering two plans for raising $4,000,000 to expand operations. Plan A is to borrow at 9 percent, and Plan B is to issue 400,000 common shares. Before any new financing,
Talon Inc. includes the following selected accounts in its general ledger at December 31, 2020:Prepare the liabilities section of Talon Inc.’s balance sheet at December 31, 2020, to show how the
Identify the accounts a lessee debits and credits when making operating lease payments.
Moe Jones Inc. issued $400,000 of 8 percent, 10-year bonds payable at a price of 114.88 on May 31, 2020. The market interest rate at the date of issuance was 6 percent, and the Moe Jones Inc. bonds
T&T Marina needs to raise $2 million to expand. T&T’s president is considering two plans:• Plan A: Issue $2,000,000 of 8 percent bonds payable to borrow the money• Plan B: Issue 100,000
Describe how each portion of a blended mortgage payment changes over the life of the mortgage.
Weisbrod Management Inc. issued 8 percent bonds with a maturity value of $6,000,000 for $5,762,618 on October 1, 2020, when the market rate of interest was 9 percent. These bonds mature on October 1,
Junior Incorporated has $3,000,000 of convertible bonds payable outstanding, with a bond premium of $30,000 also on the books. The bondholders have notified Junior Incorporated that they wish to
Gravity Inc. issued $10,000,000 of 7 percent, 20-year bonds at a premium. The bonds are retired prior to maturity at 102. The book value of the bonds is $10,453,000 at this time. Gravity Inc.
On January 1, 2020, Nanke Inc. issued $500,000 of 9 percent, five-year bonds payable at 104. Nanke has extra cash and wishes to retire all the bonds payable on January 1, 2021, immediately after
Bingo Ltd. is authorized to issue $6,000,000 of 5 percent, 10-year bonds. On January 2, 2020, when the market interest rate is 6 percent, the company issues $4,800,000 of the bonds and receives cash
Vindaloo Corp. issues a new set of 8 percent, 20-year bonds in the amount of $1,500,000 on February 1, 2020. The bonds sell at 102.00 and pay interest on January 31 and July
Silver Corp. has $156 million of bonds outstanding at December 31, 2020. Of the total, $26 million are due in 2021 and the balance in 2022 and beyond. How would Silver Corp. report its bonds payable
Journalize the following transactions of Fayuz Communications Inc.:2020Jan. 2 Issued $8,000,000 of 7 percent, 10-year bonds payable at 97.00.2 Signed a five-year capital lease on machinery. The
Marlies Inc. issued $1,500,000 of 6 percent, 10-year bonds payable and received cash proceeds of $1,393,407 on March 31, 2020. The market interest rate at the date of issuance was 7 percent, and the
On January 2, 2020, Omni Industries Inc. issued $4,000,000 of 8.5 percent, 5-year bonds when the market interest rate was 10 percent. Omni Industries pays interest annually on December 31. The issue
Consider bonds issued at a discount. Which is greater, the cash interest paid per period or the amount of interest expense?
Island Corp. issued a $400,000, 7 percent, 10-year bond payable at a price of 106 on January 1, 2020. Journalize the following transactions for Island Corp. Include an explanation for each entry.
Werstirener Brewing Ltd. issued a $600,000, five-year, 6 percent mortgage note payable on December 31, 2020, to help finance a new distribution centre. The terms of the mortgage provide for semi
Bonds payable with a maturity value of $200,000 are callable at 102.50. Their market price is 101.25. If you are the issuer of these bonds, how much will you pay to retire them before maturity?
The accounting records of Cryptocurrency Managers Inc. include the following items:RequiredShow how these items would be reported on the Cryptocurrency Managers Inc. balance sheet, including headings
Stat Inc. issued a $500,000, 4 percent, 5-year bond payable at a price of 95 on January 1, 2020. Journalize the following transactions for Stat Inc. Include an explanation for each entry. Stat uses
On December 31, 2020, Sierra Corp. issues 4 percent, 10-year convertible bonds with a maturity value of $4,500,000. The semi-annual interest dates are June 30 and December 31. The market interest
Journalize the following transactions of Applewood Corp.:2020Jan. 2 Issued 7 percent, 10-year bonds with a maturity value of $5,000,000. The bonds were sold at 97.00.Jan. 2 Signed a five-year capital
Refer to the data for Arubi Inc. in E15–4. Journalize the sale of the bonds on July 31 and the first semi-annual interest payment on October 31. No explanations are required.E15–4Arubi Inc.
Yankee Corp. sold $750,000 of 6 percent, 10-year bonds at par value on May 1, 2020, four months after the bond’s original issue date of January 1, 2020. Journalize the following transactions.
On December 31, 2020, Praga Ltd. issues 6 percent, 10-year convertible bonds with a maturity value of $6,000,000. The semi-annual interest dates are June 30 and December 31. The market interest rate
Sanjer Limited issued $700,000 of 6 percent, 10-year bonds payable on October 1, 2020, at par value. Sanjer’s accounting year ends on December 31. Journalize the following transactions. Include an
ICS Finance Corp. borrowed money by issuing $1,000,000 of 6 percent bonds payable at 98.5.a. How much cash did ICS receive when it issued the bonds payable?b. How much must ICS pay back at
Neko Inc. issued a $500,000, 3.25 percent, 10-year bond payable on January 1, 2020. Journalize the following transactions for Neko Inc. assuming that the business has a December 31 fiscal year-end.a.
The notes to Shaolin Biotech Inc.’s financial statements recently reported the following data on June 30, 2020, the company’s year-end:NOTE 4: INDEBTEDNESSLong-term debt at June 30, 2020,
On March 1, 2020, Gill Management Ltd. issues 8.5 percent, 20-year bonds payable with a maturity value of $5,000,000. The bonds pay interest on February 28 and August 31. Gill Management Ltd.
On April 1, 2020, Sora Inc. issues 7 percent, 10-year bonds payable with a maturity value of $3,000,000. The bonds pay interest on March 31 and September 30, and Sora Inc. amortizes premiums and
Oceanfront Developers Inc. issues $2,000,000 of 5 percent, semi-annual, 20-year bonds dated March 31.RequiredRecord (a) The issuance of bonds at par on March 31 (b) The next semiannual
For which bond in S15–2 will Quebec Telecom have to pay the most at maturity? Explain your answer.S15–2Compute the price of the following 4 percent bonds of Quebec Telecom:a. $100,000 issued at
TELUS Corporation’s income statement and balance sheet on MyLab Accounting provide details about the company’s long-term debt and equity. Use the data to answer the following questions:1. List
Castlegar Systems Inc. had the following information available on bonds payable outstanding at December 31, 2020, its year-end:• $5,000,000—Bonds Payable, 9 percent, interest paid on April 2 and
The board of directors of Farrell Communications Ltd. authorizes the issuance of 6 percent, 20-year bonds with a maturity value of $10,000,000. The semi-annual interest dates are March 31 and
The board of directors of Jeter Production Co. Ltd. authorizes the issuance of 4 percent, 10-year bonds with a maturity value of $12,000,000. The semi-annual interest dates are May 31 and November
Tyler Corp. is planning to issue long-term bonds payable to borrow for a major expansion. The chief executive officer, Robert Tyler, asks your advice on some related matters:a. At what type of bond
Compute the price of the following 4 percent bonds of Quebec Telecom:a. $100,000 issued at 98.5b. $100,000 issued at 102.5c. $100,000 issued at 92.6v
The Indigo Books and Music Inc. financial statements that appear in Appendix A at the end of this book and on MyLab Accounting provide details about the company’s long term debt. Use the data to

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