Question 1

If Visser Inc. issues 1,000 common shares for $5 per share,

Accepted Answer

A)  Common Shares will be credited for $5,000. 
B)  Gain on Sale of Shares will be credited for $5,000. 
C)  Retained Earnings will be credited for $5,000. 
D)  The transaction will be recorded only in a note to the financial statements. 
A)  Common Shares will be credited for $5,000. 
B)  Gain on Sale of Shares will be credited for $5,000. 
C)  Retained Earnings will be credited for $5,000. 
D)  The transaction will be recorded only in a note to the financial statements.

Question 2

For the year ended August 31, 2016, Zen Fitness Inc. had service revenue of $625,000; operating expenses of $265,000 and other expenses of $32,000. The company has a 20% tax rate and has previously accrued $25,000 in income taxes.
Instructions
a. Determine the income tax expense.
b. Prepare an income statement.
c. Prepare the entry to record the income taxes.

Accepted Answer

a.
Profit before income tax = ( revenue

Question 3

Dividends are declared out of

Accepted Answer

A)  Contributed Capital. 
B)  Preferred Shares. 
C)  Common Shares. 
D)  Retained Earnings. 
A)  Contributed Capital. 
B)  Preferred Shares. 
C)  Common Shares. 
D)  Retained Earnings.

Question 4

If the board of directors has not declared a dividend then no liability exists.

Accepted Answer

A) True 
 B)False

Question 5

The effect of the declaration of a cash dividend by the board of directors is to 
$\quad $$\quad $Increase$\quad $$\quad $$\quad $  $\quad $Decrease 
a. Shareholders' equity $\quad $ Assets 
b. Assets $\quad $$\quad $$\quad $$\quad $$\quad $ Liabilities 
c. Liabilities  $\quad $$\quad $$\quad $$\quad $Shareholders' equity 
d. Liabilities  $\quad $$\quad $$\quad $$\quad $$\quad $Assets

Accepted Answer

The answer of The effect of the declaration of a...

Question 6

Retractable preferred shares

Accepted Answer

A)  do not offer a repayment of principal. 
B)  are presented in the liability section of the balance sheet. 
C)  are presented in the equity section of the balance sheet. 
D)  would be allocated between the liability and equity sections of the balance sheet depending on the exact terms of redemption or retraction. 
A)  do not offer a repayment of principal. 
B)  are presented in the liability section of the balance sheet. 
C)  are presented in the equity section of the balance sheet. 
D)  would be allocated between the liability and equity sections of the balance sheet depending on the exact terms of redemption or retraction.

Question 7

Dividends in arrears

Accepted Answer

A)  are always considered a liability. 
B)  are a liability when they are declared. 
C)  are never considered to be a liability. 
D)  are paid to preferred shareholders only after common shareholders receive their dividends. 
A)  are always considered a liability. 
B)  are a liability when they are declared. 
C)  are never considered to be a liability. 
D)  are paid to preferred shareholders only after common shareholders receive their dividends.

Question 8

In its first year of operations, Arnold Corporation had the following transactions relating to its convertible preferred shares and common shares. The preferred dividend rate is $2 per share.   Instructions 
a. Journalize the transactions.
b. Indicate the amount to be reported for (1) preferred shares and (2) common shares at the end of the year.

Accepted Answer

a.
 @#IMG-DLM& b. (1) Preferred shares:

Question 9

A corporation is a legal entity that is combined with the owner's economic circumstances.

Accepted Answer

A) True 
 B)False

Question 10

Austrian Limited is a private corporation reporting under ASPE. At December 31, 2015, its general ledger contained the following summary data:   Additional information:
1. In 2015 dividends of $35,000 were declared on July 1 and December 31 respectively. The dividends were paid on August 10, 2015 and January 15, 2016 respectively.
2. The company's tax rate is 33%.
Instructions
a. Determine the income tax expense and prepare a multi step income statement for 2015.
b. Prepare a statement of retained earnings for 2015.

Accepted Answer

a. Income tax expens

Question 11

Which transaction will cause an increase in cash flow for the corporation?

Accepted Answer

A)  Preferred shares are exchanged for common shares. 
B)  The company issues common shares for equipment. 
C)  The company issues common shares. 
D)  One of the main shareholders sells his shares to his son. 
A)  Preferred shares are exchanged for common shares. 
B)  The company issues common shares for equipment. 
C)  The company issues common shares. 
D)  One of the main shareholders sells his shares to his son.

Question 12

Return on equity

Accepted Answer

A)  is used by management to evaluate liquidity. 
B)  calculates the rate of return shareholders are earning on their investment. 
C)  represents the equity a common shareholder has in net assets of the corporation. 
D)  is calculated by taking Profit divided by this year's Shareholders' Equity. 
A)  is used by management to evaluate liquidity. 
B)  calculates the rate of return shareholders are earning on their investment. 
C)  represents the equity a common shareholder has in net assets of the corporation. 
D)  is calculated by taking Profit divided by this year's Shareholders' Equity.

Question 13

Under the Canada Business Corporations Act, a corporation cannot pay a dividend if it would then be unable to pay its liabilities.

Accepted Answer

A) True 
 B)False

Question 14

The following selected transactions pertain to the Liang Corporation:
Jan 3 Issued 100,000 common shares for $25 cash per share.
Feb 10 Issued 6,000 common shares in exchange for special purpose equipment appraised at $159,000. Liang Corporation's common shares have been actively traded on the stock exchange at $27 per share.
Instructions
Journalize the transactions.

Accepted Answer

The answer of The following selected transactions pertain to the...

Question 15

Declaration of cash dividends increases liabilities and decreases shareholders equity.

Accepted Answer

A) True 
 B)False

Question 16

At December 31, 2015, Estania Corporation reports revenue of $5,750,000 and expenses of $3,920,000. The company has a tax rate of 27%. During the year, the company declared and paid dividends of $650,000.
Instructions
Prepare an income statement and record the adjustment to income taxes assuming no taxes have yet been accrued.

Accepted Answer

The answer of At December 31, 2015, Estania Corporation reports...

Question 17

Most of the largest Canadian companies are publically held.

Accepted Answer

A) True 
 B)False

Question 18

Corporation income tax expense is

Accepted Answer

A)  usually accrued in the adjusting entry process. 
B)  not usually accrued because it is not known what the exact liability will be until the tax return is filed. 
C)  not reported in a separate section of a corporate income statement. 
D)  calculated using profit before income taxes in the previous fiscal year. 
A)  usually accrued in the adjusting entry process. 
B)  not usually accrued because it is not known what the exact liability will be until the tax return is filed. 
C)  not reported in a separate section of a corporate income statement. 
D)  calculated using profit before income taxes in the previous fiscal year.

Question 19

Journal entries are made on the date of declaration and on the date of record date.

Accepted Answer

A) True 
 B)False

Question 20

The Board of Directors of a corporation legally owns the corporation.

Accepted Answer

A) True 
 B)False

If Visser Inc. issues 1,000 common shares for $5 per share,

Dividends are declared out of

If the board of directors has not declared a dividend then no liability exists.

Retractable preferred shares

Dividends in arrears

A corporation is a legal entity that is combined with the owner's economic circumstances.

Which transaction will cause an increase in cash flow for the corporation?

Return on equity

Under the Canada Business Corporations Act, a corporation cannot pay a dividend if it would then be unable to pay its liabilities.

Declaration of cash dividends increases liabilities and decreases shareholders equity.

Most of the largest Canadian companies are publically held.

Corporation income tax expense is

Journal entries are made on the date of declaration and on the date of record date.

The Board of Directors of a corporation legally owns the corporation.

Accounting in Action

The Recording Process

Adjusting the Accounts

Completion of the Accounting Cycle

Accounting for Merchandising Operations

Inventory Costing

Internal Control and Cash

Long-Lived Assets

Current Liabilities

Accounting Principles

Accounting for Partnerships

Corporations: Additional Topics and Ifrs

Non-Current Liabilities

The Cash Flow Statement

Financial Statement Analysis

Investments

Filters

Exam 13: Introduction to Corporations

If Visser Inc. issues 1,000 common shares for $5 per share,

Dividends are declared out of

If the board of directors has not declared a dividend then no liability exists.

Retractable preferred shares

Dividends in arrears

A corporation is a legal entity that is combined with the owner's economic circumstances.

Which transaction will cause an increase in cash flow for the corporation?

Return on equity

Under the Canada Business Corporations Act, a corporation cannot pay a dividend if it would then be unable to pay its liabilities.

Declaration of cash dividends increases liabilities and decreases shareholders equity.

Most of the largest Canadian companies are publically held.

Corporation income tax expense is

Journal entries are made on the date of declaration and on the date of record date.

The Board of Directors of a corporation legally owns the corporation.

Accounting in Action

The Recording Process

Adjusting the Accounts

Completion of the Accounting Cycle

Accounting for Merchandising Operations

Inventory Costing

Internal Control and Cash

Long-Lived Assets

Current Liabilities

Accounting Principles

Accounting for Partnerships

Corporations: Additional Topics and Ifrs

Non-Current Liabilities

The Cash Flow Statement

Financial Statement Analysis

Investments

Filters