1.Pine Ltd. is a diversified corporation and has developed the following information about its five segments:

ABCDE

Total sales$180,000$625,000$125,000$190,000$260,000

Operating profit (loss) (125,000)140,00020,000(130,000)(15,000)

Total assets780,0002,400,000525,0001,650,0002,650,000

Identify which segments would be considered as reportable segments by applying all the tests:

(A) A, B, C, D, E

(B) A, B, C, E

(C) A, B, D, E

(D) A, B, D

(E)D, D, E

2.Which of the following statements is INCORRECT regarding IFRS requirements for interim reporting?

(A) Only a statement of financial position and statement of comprehensive income are required.

(B) The same accounting policies should be used as for the annual statements.

(C) When an accounting change is applied retrospectively, the enterprise must present a statement of financial position for the beginning of the earliest comparative period.

(D) Condensed financial statements are permitted.

(E)IFRS does not mandate interim reporting, but does provide guidance if the entity wants to provide it.

3.On January 1, 2017, Cumberland Ltd. bought machinery for $ 750,000. They used straight-line depreciation for this machinery, over an estimated useful life of ten years, with no residual value. At the beginning of 2020, Detroit decided the estimated useful life of this machinery was only eight years (from the date of acquisition), still with no residual value. For calendar 2020, the depreciation expense for this machinery is

(A) $ 65,625.

(B) $ 75,000.

(C) $ 93,750.

(D) $ 105,000.

(E)$ 150,000.

4.On January 1, 2020, Regal Air Inc. enters into an eight year, non-cancellable lease agreement to lease an airplane to Atlantic Airline, with payments required at the end of each year. Both Regal Air and Atlantic Airlines are public companies. The following information relates to this agreement:

a.Atlantic Airline has the option to purchase the airplane for $ 7,000,000 at the end of the lease, at which time the airplane's fair value is expected to be $ 12,000,000.

b.The airplane cost Regal Air $ 30,000,000. It has an estimated useful life of fifteen years, and a residual value of zero at the end of that time (due to technological obsolescence).

c.Atlantic will pay all executory costs related to the leased airplane.

d.Annual year-end lease payments of $ 4,562,337 will allow Regal Air to earn an 8% return on its investment.

Which of the following statements is CORRECT for Atlantic Airline?

(A) Since the PV of the lease payment will be close to the FV of the asset, Atlantic Airline should treat this lease as a finance lease.

(B) Atlantic Airline needs to capitalize the executory costs as part of the ROU asset value.

(C) Atlantic Airline should record depreciation expense of $ 1,200,000 at the end of every year.

(D) One of the journal entries to record on January 1 , 2020 for Atlantic Airline is Debit Lease Liability $ 4,562,337 and Credit Cash for the same amount

(E)Lease Liability on January 1, 2021 should be $ 27,837,663

5.On January 1, 2020, Texas Corp. (lessor) entered into a 10 year noncancellable lease agreement with Orlando Corp. (lessee) for a machine with an option for Orlando to purchase the machine at the end of the lease term for $ 400,000. The fair value of the machine on January 1, 2020 is $ 2,400,000. The first payment was made on January 1, 2020 when the lease agreement was finalized. The interest rate of 10% which was stipulated in the lease agreement is the implicit rate set by the lessor. The effective interest method is being used. Texas expects the machine to have a ten-year life with no residual value, and be depreciated on a straight-line basis. Both entities follow IFRS. On December 31, 2029, Orlando decided not to exercise the option and return the machine to Texas.

Which of the following is CORRECT for Orlando to record the leased asset on December 31, 2029?

(A) Debit ROU Assets $ 2,400,000 and Credit Accumulated Depreciation$ 2,400,000

(B) There is no gain or loss for Orlando on December 31,2029 after they return the machine to Texas.

(C) There should be a total net gain of $ 400,000 for Orlando on December 31, 2029 after they return the machine to Texas.

(D)There should be a total net loss of $ 1,200,00 for Orlando on December 31, 2029 after they return the machine to Texas.

(E)None of the above is correct

6.Thomson Corp. provides a defined benefit pension plan for its employees, and uses IFRS to account for it. The corporation's actuary has provided the following information for the year ended December 31, 2020:

Defined benefit obligation, Dec 31 525,000

Fair value of plan assets, Dec 31 625,000

Current service cost 240,000

Interest on defined benefit obligation 24,000

Past service costs 60,000

Expected and actual return on plan assets 82,500

Contributions to plan 200,000

The pension expense to be reported for 2020 is

(A) $ 241,500.

(B) $ 324,000.

(C) $ 406,500.

(D) $ 441,500.

(E)$ 524,000.

7.Under IFRS, how are deferred tax asset and liability accounts presented on the SFP?

(A) They must be segregated into current and non-current items.

(B)They must be shown as non-current assets or liabilities.

(C) They must be shown as current assets or liabilities.

(D) They must be reported as a reduction of the related asset or liability accounts.

(E)They must be netted and the balance should be reported as current assets or liabilities

8.Which of the following statements is INCORRECT?

(A) Options that are out of the money are ignored in earnings per share calculations.

(B) The treasury stock method is used for written call options.

(C) Corporations that have only antidilutive securities are not permitted to increase their earnings per share and are required to report only basic earnings per share.

(D) Under IFRS, common shares are also called ordinary shares.

(E)Contingently issuable shares are never included in diluted earnings per share calculations.

9.At December 31, 2020, Woodstock Corp. has the following shares outstanding (all no par value):

200,000 common shares$ 1,275,000

$5 preferred, 7,200 shares$600,000

The preferred shares are cumulative and participating up to an additional 4%.

Dividends have not been paid since December 31, 2017.

Woodstock now wishes to declare a total cash dividend of $320,000.

Which of the following statements is CORRECT?

(A) Total dividend issued to preferred shareholders should be $ 108,000.

(B) Total dividend issued to common shareholders should be $ 212,000.

(C) Total dividend issued to preferred shareholders should be $ 72,000.

(D) Total dividend issued to common shareholders should be $ 188,000.

(E)Total dividend issued to preferred shareholders should be $ 96,000.

10.On December 1, 2020, Cairo Ltd. issued 500 of its 9%, $ 1,000 bonds at 103. Attached to each bond was one detachable warrant entitling the holder to purchase ten of Cairo's common shares. At this time, the market value of the bonds, without the warrants, was 95, and the market value of each warrant was $ 50. Using the residual method, the amount of the proceeds from the issuance that should be credited to Bonds Payable would be

A.$ 475,000.

B.$ 489,250.

C.$ 500,000.

D.$ 515,000.

E.$ 725,000.

11.Daniel Inc. established a cash-settled stock appreciation compensation plan on January 1, 2017. On this date, the company issued 100 cash-settled share appreciation rights (SARs) to each of its 200 employees, giving employees the right to receive cash based on the increase in the company's share price over the period the shares are held. The benchmark price of the underlying shares was established at $25.00. The plan expires on December 31, 2025.

Date

SAR value

Sharemarket value

January 1, 2017

Not required

$25.00

December 31, 2017

$6.75

$27.50

The SARs vest after employees provide two years of service. In 2017, 20 employees left the company; it was estimated that 30 more would leave before the SAR is vested.

Which of the following is not correct for the journal entry on December 31, 2017?

(A) Total compensation expense to be recorded should be $ 101,250.

(B) Total estimated employees who will be vested for the SAR are 180.

(C) Only 50% of the SAR liability should be accounted for at the end of 2017

(D) Total number of SAR to be used for the calculation of the SAR liability is 150,000.

(E)Total SAR liability for 2017 should be $ 50,625.

12.Presented below is information related to Osaka Corporation:

Subscriptions Receivable, Common Shares$ 240,000

Common Shares, no par value7,620,000

Common Shares Subscribed480,000

$ 4 Preferred Shares, no par value2,880,000

Retained Earnings1,800,000

If the subscription receivable is defaulted, which of the following is not an appropriate way to account for this transaction?

A.Common shares can be increased by $ 240,000.

B.Cash will be reduced by $ 240,000.

C.Common shares subscribed of $ 480,000 will be eliminated.

D.Contributed surplus of $ 480,000 will be recorded.

E.Subscription receivable will be reduced by $ 240,000.

13.Berne Ltd. was organized on January 1, 2020, with 300,000 no par value common shares authorized. During 2020, the corporation had the following share transactions:

Jan4Issued 120,000 shares at $ 10 per share

Mar8Issued 40,000 shares at $ 11 per share

May 17Purchased 15,000 shares at $ 12 per share and cancelled them

Jul6Issued 30,000 shares at $ 13 per share

Aug 27Issued 10,000 shares at $ 14 per share

The total amount of contributed surplus at December 31, 2020 is

A.$ 0.

B.$ 26,250.

C.$ 153,750.

D.$ 180,000.

E.$210.000.

14.Platinum Corp. uses the revenue approach to account for warranties. They sell a used car for $ 30,000 on Oct 30, 2020, with a one-year warranty covering parts and labour. The selling price for the car on a stand alone basis is $ 28,500. The cost of this used car is $ 21,000. Warranty expense is estimated at 4% of the selling price. On December 12, 2020, the car is returned for warranty repairs. This cost Platinum $ 200 in parts and $ 120 in labour. Assuming this is the only transaction or Platinum, the amount of profit/(loss) recorded by Plantinum on this transaction is:

A.$ 6,360.

B.$ 7,180.

C.$ 7,240.

D.$ 7,500.

E.$ 7,560

15.Pineapple owes Dole a $ 600,000, 12%, three-year note dated December 31, 2018. Pineapple has been experiencing financial difficulties, and still owes accrued interest of $ 72,000 on this note at December 31, 2020. Under a troubled debt restructuring, on December 31, 2020, Dole agrees to settle the note plus the accrued interest for land that Pineapple owns, which has a fair value of $ 540,000. Pineapple's original cost of the land is $ 435,000. Ignoring income taxes, on its 2020 income statement, what should Pineapple report as a result of the troubled debt restructuring?

Gain onGain on

Disposition of LandRestructuring of Debt

A.$ 237,000$ 0

B.$ 165,000$ 0

C.$ 105,000$ 0

D.$ 105,000$ 60,000

E.$ 105,000$ 132,000