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intermediate accounting
Intermediate Accounting Volume 2 4th Edition Kin Lo, George Fisher - Solutions
In the table below, choose the derivative instrument on the left side that best matches the example on the right side. There is one example for each instrument. Type of derivative Option Warrant Forward Future Swap Example A company contracts to sell 10,000 ounces of gold at $1,100/ounce on March
Identify the examples of derivatives that follow as one of the following:■ Forward contract■ Future contract■ Option■ Warrant■ Swapa. Canadian Inc. (which has some US operations) contracts with American Corp. (which has some Canadian operations) to pay the interest and principal on a
Complete the following table by indicating whether the listed transactions would improve, worsen, or have no effect on the financial ratios listed below. Consider each transaction independently. The answer for the first transaction is presented as an example. Ratio Ratio definition Ratio without
A company issues convertible bonds with a face value of $6,000,000 and receives proceeds of $6,540,000. Each $1,000 bond can be converted, at the option of the holder, into 40 common shares. The underwriter estimated the market value of the bonds alone, excluding the conversion rights, to be
JKD Company reported the following amounts on its balance sheet at July 31, 2021:Required: a. Prepare the journal entry to record the bond interest payment on July 31, 2022. b. Calculate the total number of common shares outstanding after the bonds’ conversion on July 31, 2022. c.
A company had a debt-to-equity ratio of 1.52 before issuing convertible bonds. This ratio included $400,000 in equity. The company issued convertible bonds. The value reported for the bonds on the balance sheet is $254,000, and the conversion rights are valued at $21,000.Required:After the issuance
On June 18, 2018, Gail Fisher Ltd. issued for $102 per share, 30,000 no par value, $4 cumulative, convertible preferred shares. Each preferred share could be converted into five no par value common shares at the option of the preferred shareholder. At the time of the share sale, similar
On September 30, 2018, Niagara Co. issued a $2 million, 8%, 10-year convertible bond maturing on September 30, 2028, with semi-annual coupon payments on March 31 and September 30. Each $1,000 bond can be converted into 80 no par value common shares. In addition, each $1,000 bond included 20
On January 1, 2021, Portside Co. issued a $10 million, 8%, nine-year convertible bond with annual coupon payments. Each $1,000 bond was convertible into 25 shares of Portside’s common shares. Starboard Investments purchased the entire bond issue for $10.2 million on January 1, 2021. Portside
On January 1, 2021, Christine and Ian Hacker Inc. issued (sold) $600,000 of 8%, six-year, convertible bonds for gross proceeds of $660,000. Each $1,000 bond was convertible into 20 no par value common shares. Similar non-convertible bonds were yielding 9% at that time. Interest was payable
On January 1, 2021, Christine and Ian Hacker Inc. (CIHI) issued (sold) $600,000 of 8%, six-year, convertible bonds for gross proceeds of $660,000. Each $1,000 bond was convertible into 20 no par value common shares. Similar non-convertible bonds were yielding 9% at that time. Interest was payable
On August 1, 2021, LOL Corporation issued 15-year, $5,000,000, 8%, convertible bonds for proceeds of $5,325,000. The bonds pay interest annually each July 31. Each $1,000 bond is convertible into 50 common shares at the investor’s option. If the bond had been sold without the conversion feature,
On January 1, 2021, Gretta Cat Co. (GCC) issued (sold) $2,000,000 of five-year, 5% convertible bonds that pay interest semi-annually on June 30 and December 31. At the investor’s option, each $1,000 bond may be converted into 10 common shares any time after December 31, 2024. The sales proceeds
Storoshenko Inc. previously sold $1,000,000 in convertible bonds for $1,050,000. At time of issuance, the fair value of the equivalent non-convertible bond was $1,000,000. Interest on the bonds was last paid on August 31, 2021. On September 1, 2021, Storoshenko Inc. repurchased 100% of the
On January 1, 2021, Luv-U-2bits Ltd. sold $500,000 of 6%, five-year convertible bonds for $520,000. Each $1,000 bond was convertible into 40 no par value common shares. Similar nonconvertible bonds were yielding 7% at that time. Interest was paid semi-annually on June 30 and December 31. On
Oshawa Motor Parts issued 100,000 stock options to its employees. The company granted the stock options at-the-money, when the share price was $30. These options have no vesting conditions. By year-end, the share price had increased to $32. Oshawa’s management estimates the value of these options
Pelham Farms granted 200,000 stock options to its employees. The options expire 10 years after the grant date of January 1, 2018, when the share price was $25. Employees still employed by Pelham five years after the grant date may exercise the option to purchase shares at $50 each; that is, the
Rainy Lake Lodge issued 30,000 at-the-money stock options to its management on January 1, 2021. These options vest on January 1, 2024. Rainy Lake’s share price was $12 on the grant date and $18 on the vesting date. Estimates of the fair value of the options showed that they were worth $2 on the
On January 1, 2021, Unbelievable Golf Inc. granted stock options to various employees for past service. The options, which vested immediately and expired in four years, entitled the employees to purchase 50,000 no par value common shares for $27 each. The market price of Unbelievable common shares
On January 1, 2021, Stephanie Place Inc. established a cash-settled stock appreciation rights plan for its executives, the details of which are listed below: ■ 180,000 stock appreciation rights (SARs) were granted. ■ Each SAR entitled the executives to receive cash equal to the
On January 1, 2021, Honeymoon Corp. established a cash-settled stock appreciation rights plan for its senior employees, the details of which are listed below: ■ 100,000 stock appreciation rights (SARs) were granted. ■ Each SAR entitled the employees to receive cash equal to the
Refer to P14-31 above. Assume Honeymoon Corp. reports its financial results in accordance with ASPE.Required: a. Complete the schedule below showing the amount of compensation expense for each of the five years, starting with 2021. If necessary, refer to the example illustrated in Exhibit
On January 1, 2018, Thomasburg Inc. granted stock options to officers and key employees for the purchase of 200,000 of the company’s no par value common shares at $25 each. The options were exercisable between January 1, 2020, and December 31, 2024, by grantees still employed by the company. The
Refer to the 2016 financial statements for Canadian Tire Corporation in Appendix C. Required: a. How many stock options were outstanding at the end of 2016? Reconcile the change in the outstanding options for the year using the same categories that the company reports in its notes to the
On July 1, 2018, Ameri-Can Limited issued $3,000,000 of convertible bonds. The bonds pay annual interest of 10% on June 30. Each $1,000 bond is convertible into 75 common shares, at the investor’s option, between July 1, 2023, and July 1, 2028, at which time the bonds mature. The financial
Identify whether each of the following derivatives provides a fair value hedge or a cash flow hedge if it is used as a hedging instrument. Item a. A forward contract to buy US$1 million for C$1.05 million. b. A swap of investment with a variable interest rate with one providing a fixed return. c. A
Refer to P14A-49 above. Assume that Jamie designated the forward as a cash flow hedge. Required:Record the required journal entries for June 18, June 30, and August 12, using the net method. If no entries are required, state “no entry required” and indicate why.P14A-49On June 18, 2021,
On December 1, 2021, Aaron Brandon Ltd. entered into a binding agreement to buy inventory costing US$200,000 for delivery on February 16, 2022. Terms of the sale were COD (cash on delivery). Aaron, which has a December 31 year-end, decided to hedge its foreign exchange risk and entered into a
Refer to P14-34 above. Assume that Stephanie Place Inc. reports its financial results in accordance with ASPE. Required: a. Complete the schedule below showing the amount of compensation expense for each of the six years, starting with 2021. If necessary, refer to the example illustrated
On January 1, 2018, The Ultimate Accountant Inc. granted stock options to officers and key employees for the purchase of 150,000 of the company’s no par value common shares at $22 each. The options were exercisable between January 1, 2021, and December 31, 2025, by grantees still employed by the
Sam’s Kennel Corp (SKC) maintains an employee stock option plan for its senior executive. On January 1, 2021, SKC awarded its employees a total of 20,000 options that are first exercisable on January 1, 2025. Each option, which expires on December 31, 2029, enables the employees to buy one common
Corus Manufacturing Ltd., a sailboat manufacturer, is preparing its financial statements for the year ended August 31, 2018. It is September 15 and your CFO presents you (the controller) with a list of issues that require additional attention: i. The company repurchased 100,000 common shares
A company located in Canada spends $6,000 to purchase a foreign currency futures contract to buy US$500,000 at C$1.02:US$1.00. The contract matures 90 days later. Under which of the following circumstances could the company consider this future contract to be a fair value hedge for accounting
On January 1, 2021, Samantha Clark Corp. established a cash-settled stock appreciation rights plan for its executives, the details of which are listed below: ■ 100,000 stock appreciation rights (SARs) were granted. ■ Each SAR entitled the executives to receive cash equal to the
Taj Singh Corp. (TSC) reports its financial results in accordance with IFRS. It has a December 31 year-end.On January 1, 2021, TSC granted stock options to officers and key employees that entitled them to collectively purchase 10,000 of the company’s no par value common shares for $30 each. The
The following is selected balance sheet information for Taylor Company, which has operations located primarily in Canada. Amounts are in Canadian dollars unless otherwise indicated.Required:Taking into account the above information, first identify whether Taylor Company could potentially identify
Refer to P14A-47 above. Assume that Aaron designated the forward as a cash flow hedge. Required:Record the required journal entries for December 1, December 31, and February 2, using the net method. If no entries are required, state “no entry required” and indicate why.P14A-47On December
On June 18, 2021, Jamie Banfied Inc. signed a contract to sell machinery for €100,000 (inventoried cost C$110,000) for delivery on August 12, 2021. Terms of the sale were COD (cash on delivery). Jamie, which has a June 30 year-end, entered into a forward agreement to sell €100,000 on August 12
a. What information does EPS communicate to investors? b. Describe the difference between basic and diluted EPS. c. What are potential ordinary shares? d. Provide three examples of potential ordinary shares.
On August 15, 2018, Jarvis Company issued 50,000 options on the shares of RBC (Royal Bank Corporation). Each option gives the option holder the right to buy one share of RBC at $60 each until March 16, 2019. Jarvis received $150,000 for issuing these options. At the company’s year-end of December
On December 19, 2018, Enchanted Inc. sold 1,000 put options on the common shares of CIBC. Each option gives the option holder the right to sell one share of CIBC at $100 each until March 19, 2019. Enchanted received $1,000 for issuing these options. At the company’s year-end of December 31, 2018,
A company pays $8,000 to purchase futures contracts to buy 200 ounces of gold at $1,200/ ounce. At the company’s year-end, the price of gold was $1,230/ounce and the value of the company’s futures contracts increased to $12,000. Required:Record the journal entries related to these futures.
On December 15, a company enters into a foreign currency forward to buy €200,000 at C$1.32 per euro in 30 days. The exchange rate on the day of the company’s year-end of December 31 was C$1.30:€1. Required:Record the journal entries related to this forward contract.
Kearney Corporation issued call options on 20,000 shares of BCE Inc. on October 21, 2021. These options give the holder the right to buy BCE shares at $33 per share until May 17, 2022. For issuing these options, Kearney received $30,000. On December 31, 2021 (Kearney’s fiscal year-end), the
XYZ, a public company, is required to disclose earnings per share information in its financial statements for the year ended December 31, 2021. The facts about XYZ’s situation are as follows: ■ At the beginning of fiscal 2021, 450,000 ordinary shares, issued for $5.75 million, were
a. What is the formula for basic EPS? b. How is net income available to ordinary shareholders determined? c. How does other comprehensive income affect the calculation of EPS?
a. Discuss how declared and undeclared dividends on cumulative preferred shares and on non-cumulative preferred shares affect the computation of net income available to ordinary shareholders. b. Explain the underlying logic for these requirements.
For the year ended December 31, 2018, Ghostly Productions Inc. earned $5,000,000. Outstanding preferred shares included $1,000,000 in 3% cumulative preferred shares issued on January 1, 2017, and $2,000,000 in 6% non-cumulative preferred shares issued on January 1, 2018. Dividends on the cumulative
You, Sarina Felmeguchi, are the chief financial officer of SPE Corporation, a public company whose shares are traded on the Toronto Stock Exchange. You are in the process of finalizing the financial statements for 2021. SPE’s chief executive officer, Margaret D. Tale, is a very hands-on manager
For the year ended December 31, 2021, Mixed Up Productions Inc. earned $10,000,000. Outstanding preferred shares included $2,000,000 in 4% cumulative preferred shares issued on January 1, 2019, and 30,000 $100 non-cumulative preferred shares issued on January 1, 2020, that are each entitled to
For each of the years ended December 31, 2021 and 2022, Accountants Without Borders Corp. earned $7,000,000. Outstanding preferred shares included 10,000, $100 cumulative preferred shares “A” that are each entitled to dividends of $1 per quarter and 15,000, $100 non-cumulative preferred shares
a. Describe how each of the following affects the determination of the weighted average number of shares outstanding (WASO): i. Treasury shares (ordinary) ii. Stock splits iii. Stock dividends b. Provide three reasons why IFRS requires a standardized adjustment date for stock
Potatohead Corporation had 150,000 ordinary shares outstanding on January 1, 2018. On April 1, 2018, Potatohead issued an additional 80,000 shares. On July 1, 2018, Potatohead repurchased 60,000 ordinary shares and cancelled them. On October 1, 2018, Potatohead issued an additional 20,000 ordinary
Eggplant Solutions Inc. had 150,000 ordinary shares outstanding on January 1, 2018. On April 1, 2018, Eggplant issued an additional 80,000 shares. On June 1, 2018, the company declared and issued a two-for-one stock split. On July 1, 2018, Eggplant repurchased 60,000 ordinary shares and cancelled
Corporate Financial Innovations Inc. had 100,000 ordinary shares outstanding on January 1, 2018. On February 1, 2018, Corporate repurchased 50,000 shares, cancelling 30,000 and holding the balance as treasury shares. On June 1, 2018, the company declared and issued a 1.5-for1 stock split. On July
On January 1, 2018, Barbara Lee Innovations Inc.’s (BLI) share capital included 220,000 issued ordinary shares of which 200,000 were outstanding. On February 1, 2018, the company declared and distributed a three-for-one stock split. On March 1, 2018, BLI issued an additional 60,000 shares, 20,000
The ordinary share transactions of Caltown Financing Inc. and net income for its latest three years are summarized below: Caltown does not have any preferred shares outstanding. Required: a. Calculate the weighted average number of ordinary shares outstanding in each of 2021, 2022,
Wong’s Lingerie Inc. (WLI) has been in business for over 10 years. As at January 1, 2018, its capital structure consisted of 200,000 ordinary shares; $500,000 of 4% non-cumulative preferred shares; and 20,000, $100, 3% cumulative preferred shares. Net income for the year ended December 31, 2018,
Trust Me Renovations Corp. (TMRC) was incorporated on January 1, 2018. At that time, it issued 100,000 ordinary shares; 10,000, $100, 4% preferred shares “A”; and 20,000, $100, 5% preferred shares “B.” Net income for the year ended December 31, 2018, was $400,000. TMRC declares and pays a
Balloons Aloft Inc. (BAI) was incorporated on January 1, 2018. At that time, it issued 100,000 ordinary shares; 10,000, $100, 4% preferred shares “A”; and 20,000, $100, 5% preferred shares “B.” Net income for the year ended December 31, 2018, was $300,000. BAI declares and pays a total of
Umbrellas Unlimited Ltd. (UUL) was incorporated on January 1, 2018. At that time, it issued 100,000 ordinary shares; 10,000, $100, 4% preferred shares “A”; and 20,000, $100, 5% preferred shares “B.” Net income for the year ended December 31, 2018, was $200,000. UUL neither declares nor pays
Burlington Bathrooms Inc. (BBI) had 100,000 ordinary shares outstanding on January 1, 2021. Transactions throughout 2021 affecting its shareholdings follow:■ February 1: BBI issued 10,000, $100, cumulative 5% preferred shares. ■ March 1: BBI issued 30,000 ordinary shares. ■ April 1:
Princess and Frog Corp. was formed on January 1, 2017. At that time, it issued 50,000 ordinary shares and 50,000, $100, cumulative 4% preferred shares. Subsequent transactions affecting its shareholdings follow: 2017 ■ September 1: Princess issued 20,000, $100, non-cumulative 6%
Manjit’s Mannequin Supply Inc. (MMSI) was incorporated on January 1, 2017. At that time, it issued 50,000 ordinary shares and 30,000, $100, 5% non-cumulative preferred shares. Transactions throughout 2018 affecting MMSI’s shareholdings follow: a. March 1: MMSI issued 20,000 ordinary
Blue Riding Stables Corp. has been in business for over 20 years. Its capital structure as at January 1, 2021, consisted of 25,000 ordinary shares and $200,000, 4%, non-cumulative preferred shares. Subsequent transactions affecting its shareholdings follow: 2021 ■ March 1: Blue issued
a. Define a simple capital structure. b. Define a complex capital structure. c. Define in-the-money call options. d. Define at-the-money call options. e. Define out-of-the-money call options.
Four different companies have many similarities, including the following: 1. They all earned net income of $2,000,000 for the year ended December 31, 2021. 2. They are all subject to a 30% tax rate. 3. The average price of all four companies’ ordinary shares during the year was
Four different companies have many similarities, including the following: 1. They all earned net income of $1,000,000 for the year ended December 31, 2021. 2. They are all subject to a 40% tax rate. 3. The average price of all four companies’ ordinary shares during the year was
a. What is the formula for diluted EPS? b. What are dilutive potential ordinary shares? Antidilutive potential ordinary shares? How do they each impact the computation of diluted EPS? c. Describe the procedure for identifying dilutive and antidilutive potential ordinary shares and
The net income for Rip’s Curling Corp. for the year ended December 31, 2021, was $700,000. Rip had 50,000 ordinary shares outstanding at the beginning of the year. Rip declared and distributed a three-for-one stock split on May 1, 2021, and issued (sold) 30,000 ordinary shares on November 1,
Jamie’s Golf Ltd.’s net income for the year ended December 31, 2021, was $900,000. Jamie had 100,000 ordinary shares outstanding at the beginning of the year. Jamie declared and distributed a 10% stock dividend on June 1, 2021, and issued (sold) 10,000 ordinary shares on October 1, 2021. Select
Ron’s Squash Inc.’s net income for the year ended December 31, 2021, was $140,000. Ron had 60,000 ordinary shares outstanding at the beginning of the year. Ron wanted to consolidate the number of shares outstanding and so declared a one-for-two stock split effective June 1, 2021. The company
a. What is the treasury stock method and when is it used? b. Briefly describe the application of the treasury stock method. c. What does the treasury stock method assume about the exercise date? What is the exception to the rule with respect to the assumed exercise date? What alternative
During 2021, Fun with Numbers Inc. (FWNI) had four series of employee stock options outstanding, the details of which follow: 1. Options A entitle employees to purchase 10,000 ordinary shares for $19 each. This series of options was granted on February 1, 2019, and expires on December 31,
I Am Free Corp. has three stock option plans outstanding on December 31, 2021. They provide the holders with the following entitlements: 1. Stock option A—The holders may purchase 30,000 ordinary shares at any time on or before December 31, 2025, for $20 each. 2. Stock option B—The
During 2021, Fuzzy Pandas Inc. (FPI) had three series of employee stock options outstanding, details of which follow: 1. Option A entitle employees to purchase 10,000 ordinary shares for $22 each. This series of options was granted on February 1, 2019, and expires on June 30, 2021. 2.
In 2018, TC Ash Inc.’s net income was $150,000. Ash had 100,000 ordinary shares outstanding at year-end. There were two ordinary share transactions during the year: (i) Ash declared and distributed a two-for-one stock split on March 1, 2018; and (ii) Option C was exercised on April 1,
Broken Man Inc. had 100,000 ordinary shares outstanding in all of 2021. On January 1, 2019, Broken issued at par $500,000 in 7% bonds maturing on January 1, 2027. Each $1,000 bond is convertible into 30 ordinary shares. Assume that the effective interest rate is 7%. There are 10,000
The following information is available for Jill’s Emporium Ltd., which reports its financial results in accordance with IFRS.Required:a. Compute Jill’s basic EPS for the year ended December 31, 2018. b. Prepare a schedule that sets out the income effect, share effect, and incremental EPS
The following information is available for Bobby’s Baubles Corp., which reports its financial results in accordance with IFRS:Required:a. Compute Bobby’s basic EPS for the year ended December 31, 2021. b. Prepare a schedule that sets out the income effect, share effect, and incremental EPS
Select information for George’s Dive Adventures Corp. (GDAC) follows: ■ GDAC earned net income of $4,000,000 for the year ended December 31, 2021. ■ GDAC was subject to a 30% tax rate. ■ GDAC had 2,000,000 ordinary shares outstanding during the entire year; their average
Catronic Ltd. had 80,000 ordinary shares outstanding in all of 2021. On January 1, 2019, Catronic issued at par $300,000 in 4% bonds maturing on January 1, 2031. Each $1,000 bond is convertible into 20 ordinary shares. Assume that the effective interest rate is 4%.There are 4,000, $100, outstanding
Select information for Gail’s Play School Corp. (GPSC) follows: ■ GPSC earned net income of $9,000,000 for the year ended December 31, 2021. ■ GPSC was subject to a 40% tax rate. ■ GPSC had 5,000,000 ordinary shares outstanding during the entire year; their average market
Pendulum Toys Corp. (PTC) was incorporated on January 1, 2018. At that time, it issued 50,000 ordinary shares; 5,000, $100, 5% cumulative preferred shares “A”; and 30,000, $100, 6% noncumulative preferred shares “B.” Dividends were not declared or paid during 2018. PTC also issued at par
During all of 2018, Sandhawalia Computer Corp.’s (SCC) capital structure included the following: ■ 200,000 ordinary shares outstanding ■ 15,000, $100, 4% non-cumulative Series 1 preferred shares ■ 12,000, $100, 3% cumulative Series 2 preferred shares ■ $1,000,000, 5%
Details of Crothers Aussie Corp.’s (CAC) capital structure during 2018 follow:■ 300,000 ordinary shares were outstanding on January 1, 2018; 100,000 additional ordinary shares were issued on July 1, 2018. ■ $2,000,000, 4.5% bonds maturing on December 31, 2024. The bonds were issued at
Sherbrook Pizza Inc. (SPI) was incorporated on January 1, 2018. Its capital structure included 5,000 ordinary shares; 1,000, $100, 4%, non-cumulative preferred shares; and 10,000 options on ordinary shares with a strike price of $10. SPI’s net income (loss) for the year ended December 31, 2018,
Dartmouth Subs Ltd. (DSL) was incorporated on January 1, 2018. Its capital structure includes 5,000 ordinary shares; 2,000, $100, 3% cumulative preferred shares; and 6,000 options on ordinary shares with a strike price of $15. DSL’s net income (loss) for the year ended December 31, 2018, was
During all of 2018, Josh’s Sportswear Inc.’s (JSI) capital structure included the following: ■ 20,000 ordinary shares outstanding ■ 3,000, $100, 5% cumulative preferred shares ■ $500,000, 6% bonds maturing on January 1, 2023. The bonds were issued at par. Each $1,000 bond
The following are selected details of Kitchener Fasteners Inc.’s capital structure as at January 1, 2021: ■ 100,000 ordinary shares issued and outstanding. ■ 10,000, $100 cumulative preferred shares “A” with a stated dividend rate of 2% per annum. At the option of the holder,
The following are selected details of Complex Capital Structures Inc.’s capital structure as at January 1, 2018: ■ 400,000 ordinary shares were issued; 200,000 were outstanding. ■ Bonds A—$2,000,000, 4%, semi-annual bonds maturing December 31, 2026. At the option of the holder,
Four independent situations follow:Required: a. For each of the four independent situations, compute basic earnings per share and diluted earnings per share from each of continuing operations, discontinued operations, and operations. b. Summarize IFRS requirements with respect to
The following are selected details of Kingston Objects Inc.’s capital structure as at January 1, 2018: ■ 200,000 ordinary shares issued and outstanding. ■ 100,000 cumulative preferred shares “A” that are each entitled to dividends of $4 per annum. ■ 50,000, $100
The following are selected details of Simple Objects Inc.’s capital structure as at January 1, 2018: ■ 300,000 ordinary shares were issued; 250,000 were outstanding. ■ Bonds A—$1,000,000, 3%, semi-annual bonds maturing December 31, 2026. At the option of the holder, each $1,000
Peter is currently 30 years old and he plans to retire early, in 25 years’ time. He would like to have an income of $50,000 per year during his retirement, which he anticipates will last for 30 years. Assume that Peter receives the retirement income at the end of each of the 30
In the consulting firm where you are employed, you are considered the “pensions guru.” Whenever a client has a question related to pensions, he or she is referred to you for advice. Recently, two clients approached you with the following unrelated issues: Case 1: This year the stock market
The following table provides information for a defined benefit pension plan:Required:Compute the amount of other comprehensive income for 2018 to 2020. End-of-year balances, in $000's Pension assets at fair value Pension obligations at present value Net pension surplus (deficit) Transactions for
Templeton Company sponsors a defined contribution pension plan for its employees. The plan specifies that the company will contribute $2 for every dollar that an employee contributes to the plan. Employees are eligible to contribute up to 5% of their salary to the pension plan. During the current
Umbria Products has a defined contribution pension plan for its employees. The plan requires the company to contribute 15% of these employees’ salaries to the pension. For the current year, total salary for employees covered by the pension plan amounted to $60 million, of which 80% is
Gidget’s Cat Emporium Inc. (GCE) maintains a defined contribution pension plan for its employees. GCE is required to contribute 8% of qualifying employees’ salaries to the pension. GCE’s year-end is December 31. Other pertinent information follows:■On February 15, 2019, GCE remitted
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