Question 1

Which statement about dividends is correct?

Accepted Answer

A)  Dividends on cumulative preferred shares are not discretionary payments. 
B)  Dividends are mandatory payments required for both common and preferred shares. 
C)  Dividends are discretionary payments that can be made for common and preferred shares. 
D)  Dividends must be paid on common shares before dividends can be paid on preferred shares. 
A)  Dividends on cumulative preferred shares are not discretionary payments. 
B)  Dividends are mandatory payments required for both common and preferred shares. 
C)  Dividends are discretionary payments that can be made for common and preferred shares. 
D)  Dividends must be paid on common shares before dividends can be paid on preferred shares.

Question 2

Which statement is correct about "par value"?

Accepted Answer

A)  Par value refers to the price at which a common share is sold to the equity holders. 
B)  The dividend rate can be specified as a percentage of the par value for common shares. 
C)  The dividend rate can be specified as a percentage of the par value for preferred shares. 
D)  Par value refers to the price at which a preferred share is sold to the equity holders. 
A)  Par value refers to the price at which a common share is sold to the equity holders. 
B)  The dividend rate can be specified as a percentage of the par value for common shares. 
C)  The dividend rate can be specified as a percentage of the par value for preferred shares. 
D)  Par value refers to the price at which a preferred share is sold to the equity holders.

Question 3

Burlington Corp.has a single class of shares.As its year ended December 31,2017,the company had 5,000,000 shares issued and outstanding.On the stock exchange,these shares were trading at around $7.In the company's accounts,these shares had a value of $50,000,000.The equity accounts also show $650,000 of contributed surplus from previous repurchases of shares.
On January 15,2018,Burlington repurchased and cancelled 250,000 shares at a cost of $7 per share.Later in the year,on August 20,the company repurchased and cancelled a further 475,000 shares at a cost of $14 per share.
Required:
Record the journal entries for the two share transactions in 2018.

Accepted Answer

Note that the common shares ha

Question 4

Below are details relating to balances for the equity accounts of Isha Company,and changes to those balances.Note that AOCI is accumulated other comprehensive income.
   Required:
Prepare a statement of changes in equity for the years ended December 31,2017.

Accepted Answer

Isha Company Ltd.
Statement of

Question 5

Briefly describe the difference between issued and outstanding shares.

Accepted Answer

Issued shares are the net numb

Question 6

Which statement is correct?

Accepted Answer

A)  Equity holders are concerned more about the debt accounts in the financial statements. 
B)  Equity holders are concerned about the debt and equity accounts in the financial statements. 
C)  Debt holders are concerned about the debt and equity accounts in the financial statements. 
D)  Debt holders are concerned more about the equity accounts in the financial statements. 
A)  Equity holders are concerned more about the debt accounts in the financial statements. 
B)  Equity holders are concerned about the debt and equity accounts in the financial statements. 
C)  Debt holders are concerned about the debt and equity accounts in the financial statements. 
D)  Debt holders are concerned more about the equity accounts in the financial statements.

Question 7

Which statement best describes the accounting when a company cancels its own shares at an amount higher than the average share value?

Accepted Answer

A)  Contributed surplus and retained earnings will be credited. 
B)  Contributed surplus and retained earnings will be debited. 
C)  Contributed surplus will be credited, thereby increasing equity. 
D)  Contributed surplus will be debited, thereby decreasing equity. 
A)  Contributed surplus and retained earnings will be credited. 
B)  Contributed surplus and retained earnings will be debited. 
C)  Contributed surplus will be credited, thereby increasing equity. 
D)  Contributed surplus will be debited, thereby decreasing equity.

Question 8

If 10,000 shares with par value of $15/share are issued for $20/share,how much will be presented as "contributed surplus" for financial statement purposes?

Accepted Answer

A)  $10,000 
B)  $50,000 
C)  $150,000 
D)  $200,000 
A)  $10,000 
B)  $50,000 
C)  $150,000 
D)  $200,000

Question 9

Use the facts from #13,above,to determine how much each of the three classes of shares receives of the $1,000,000 cash dividend if dividends were last declared in 2017.

Accepted Answer

Class A $400,000
Class B $150,

Question 10

What kind of transaction is "appropriated reserves"?

Accepted Answer

A)  An example of "contributed surplus." 
B)  An example of a transaction with owners. 
C)  An example of a "contributed capital." 
D)  An example of a transaction with non-owners. 
A)  An example of "contributed surplus." 
B)  An example of a transaction with owners. 
C)  An example of a "contributed capital." 
D)  An example of a transaction with non-owners.

Question 11

Which statement is correct concerning property dividends?

Accepted Answer

A)  Issuing property dividends is a common method of distributing value to the shareholders. 
B)  A property dividend could be used to transfer assets from a subsidiary to a parent company. 
C)  Property dividends cannot be used by a parent company to distribute shares of an associate or subsidiary to its shareholders. 
D)  The historical value of the property is used for purposes of recording the value of the dividend. 
A)  Issuing property dividends is a common method of distributing value to the shareholders. 
B)  A property dividend could be used to transfer assets from a subsidiary to a parent company. 
C)  Property dividends cannot be used by a parent company to distribute shares of an associate or subsidiary to its shareholders. 
D)  The historical value of the property is used for purposes of recording the value of the dividend.

Question 12

Pixel Points Inc.has a single class of shares.As at its year ended December 31,2017,the company had 1,000,000 shares issued and outstanding.These shares have a book value of $5,000,000 on the balance sheet.
During 2018,Pixel Points repurchased 5% of the issued shares from one of the minority shareholders at a cost of $7 per share.The company held these shares in treasury and later found a buyer for half of these shares at $8 per share.The other shares were sold at $6 to another investor.
Required:
Assume the Pixel Points fallows the guidance in ASPE pertaining to accounting for equity transactions.Record the share transactions using the two-transaction method for treasury shares.

Accepted Answer

Repurchase

Question 13

Pixel Points Inc.has a single class of shares.As at its year ended December 31,2017,the company had 1,000,000 shares issued and outstanding.These shares have a book value of $5,000,000 on the balance sheet.
During 2018,Pixel Points repurchased 5% of the issued shares from one of the minority shareholders at a cost of $7 per share.The company held these shares in treasury and later found a buyer for half of these shares at $8 per share.The other shares were sold at $6 to another investor.
Required:
Assume the Pixel Points fallows the guidance in ASPE pertaining to accounting for equity transactions.Record the share transactions using the single-transaction method for treasury shares,which is the preferred accounting method.

Accepted Answer

Repurchase

Question 14

Which is an example of "contributed capital"?

Accepted Answer

A)  Retained earnings. 
B)  Preferred shares. 
C)  Other comprehensive income. 
D)  Accumulated other comprehensive income. 
A)  Retained earnings. 
B)  Preferred shares. 
C)  Other comprehensive income. 
D)  Accumulated other comprehensive income.

Question 15

Which statement about "share buyback" is correct?

Accepted Answer

A)  If the repurchase price is below the issue price, an accounting "gain" results. 
B)  If the repurchase price is below the issue price, the difference goes to "common shares." 
C)  If the repurchase price is below the issue price, the difference goes to "contributed surplus." 
D)  If the repurchase price is below the issue price, an accounting "loss" results. 
A)  If the repurchase price is below the issue price, an accounting "gain" results. 
B)  If the repurchase price is below the issue price, the difference goes to "common shares." 
C)  If the repurchase price is below the issue price, the difference goes to "contributed surplus." 
D)  If the repurchase price is below the issue price, an accounting "loss" results.

Question 16

Who uses information about "equity" and what information about equity is useful to financial statement users?

Accepted Answer

As equity has legal priority below that

Question 17

When is a corporation legally obligated (liable)to pay dividends?

Accepted Answer

A corporation is leg

Question 18

Mountip Inc.was incorporated under provincial legislation with a December 31 year-end.The company has a single class of shares.As at December 31,2016,it had 150,000 shares issued and outstanding.These shares had a book value of $5,700,000 on the balance sheet.During 2017,Mountip repurchased 5% of the issued shares from one of the minority shareholders at a cost of $48 per share.The company held these in treasury and later found a buyer for half of these shares at $52.The other half were sold at $46 to another investor.
Required:
Record the share transactions using the alternative two-transaction method for treasury stock.

Accepted Answer

Two-transaction method:
Note that the ba

Question 19

What needs to be reconciled in each of the components of the statement of changes in equity?

Accepted Answer

For each component of equity (e.g.,contr

Question 20

Which statement about a "treasury shares" is correct?

Accepted Answer

A)  No company is permitted to hold treasury shares. 
B)  Treasury shares have voting rights. 
C)  Treasury shares receive dividends. 
D)  There are two methods that can be used to account for treasury shares: the single-transaction method and the two-transaction method. 
A)  No company is permitted to hold treasury shares. 
B)  Treasury shares have voting rights. 
C)  Treasury shares receive dividends. 
D)  There are two methods that can be used to account for treasury shares: the single-transaction method and the two-transaction method.

Which statement about dividends is correct?

Which statement is correct about "par value"?

Below are details relating to balances for the equity accounts of Isha Company,and changes to those balances.Note that AOCI is accumulated other comprehensive income. Required: Prepare a statement of changes in equity for the years ended December 31,2017.

Briefly describe the difference between issued and outstanding shares.

Which statement is correct?

Which statement best describes the accounting when a company cancels its own shares at an amount higher than the average share value?

If 10,000 shares with par value of $15/share are issued for $20/share,how much will be presented as "contributed surplus" for financial statement purposes?

Use the facts from #13,above,to determine how much each of the three classes of shares receives of the $1,000,000 cash dividend if dividends were last declared in 2017.

What kind of transaction is "appropriated reserves"?

Which statement is correct concerning property dividends?

Which is an example of "contributed capital"?

Which statement about "share buyback" is correct?

Who uses information about "equity" and what information about equity is useful to financial statement users?

When is a corporation legally obligated (liable)to pay dividends?

What needs to be reconciled in each of the components of the statement of changes in equity?

Which statement about a "treasury shares" is correct?

Current Liabilities and Contingencies

Non-Current Financial Liabilities

Complex Financial Instruments

Earnings Per Share

Accounting for Income Taxes

Pensions and Other Employee Future Benefits

Accounting for Leases

Statement of Cash Flows

Accounting Changes

Filters

Exam 3: Equities

Which statement about dividends is correct?

Which statement is correct about "par value"?

Below are details relating to balances for the equity accounts of Isha Company,and changes to those balances.Note that AOCI is accumulated other comprehensive income. Required: Prepare a statement of changes in equity for the years ended December 31,2017.

Briefly describe the difference between issued and outstanding shares.

Which statement is correct?

Which statement best describes the accounting when a company cancels its own shares at an amount higher than the average share value?

If 10,000 shares with par value of $15/share are issued for $20/share,how much will be presented as "contributed surplus" for financial statement purposes?

Use the facts from #13,above,to determine how much each of the three classes of shares receives of the $1,000,000 cash dividend if dividends were last declared in 2017.

What kind of transaction is "appropriated reserves"?

Which statement is correct concerning property dividends?

Which is an example of "contributed capital"?

Which statement about "share buyback" is correct?

Who uses information about "equity" and what information about equity is useful to financial statement users?

When is a corporation legally obligated (liable)to pay dividends?

What needs to be reconciled in each of the components of the statement of changes in equity?

Which statement about a "treasury shares" is correct?

Current Liabilities and Contingencies

Non-Current Financial Liabilities

Complex Financial Instruments

Earnings Per Share

Accounting for Income Taxes

Pensions and Other Employee Future Benefits

Accounting for Leases

Statement of Cash Flows

Accounting Changes

Filters