Question: Nilson Inc. had accounting income of $156,

> Access the Bombardier Inc. financial statements for the year ended December 31, 2014, which can be found on SEDAR (www.sedar.com). Instructions: (a) The company has many different types of shares authorized, issued, and/or outstanding at the end of 2014

> Coa Corporation recently needed to find temporary inventory storage space when transitioning from an old factory to a newly built factory within the same city. Coa signed a 10-month lease on a warehouse requiring monthly payments in advance of $14,500. (

> Blane Inc. entered into a five-year lease of equipment from Zdrinka Inc. At the lease’s inception, it is estimated that the equipment has an economic life of eight years and fair value of $250,000. Present value of minimum lease payments amounts to $215,

> Lee Ltd. recently signed a lease for equipment from Photon Inc. The lease term is five years and requires equal rental payments of $32,000 at the beginning of each year. The equipment has a fair value at the lease’s inception of $140,000, an estimated us

> Turcotte Limited, a public company following IFRS 16, decided to upgrade the coffee machines in all of its office locations. Turcotte leased 50 machines from Coffee Tyme Ltd. on July 1, 2017 (to purchase the coffee machines instead would cost Turcotte $3

> Use the information for Merrill Corporation from BE20-11. Assume that a residual value of $17,000 is expected at the end of the lease, but that Merrill does not guarantee the residual value. Using tables, a financial calculator, or Excel functions, calcu

> Merrill Corporation, which uses ASPE, enters into a six-year lease of equipment on September 13, 2017 that requires six annual payments of $28,000 each, beginning September 13, 2017. In addition, Merrill guarantees the lessor a residual value of $17,000

> Langlois Services Inc. accounts for right-of-use assets under IFRS 16 for a lease of a truck. The lease includes a residual value guarantee at the end of the term of the lease of $16,000. Langlois estimates that the likelihood for the residual value of $

> Lagace Ltd. entered into a lease on June 1, 2017. The lease term is six years and requires annual rental payments of $30,000 at the beginning of each year. Lagace’s incremental borrowing rate is 8% and the rate implicit in the lease is 9%. (a) Calculate

> Access the annual financial statements, including the accompanying notes, of Loblaw Companies Limited for its 52 weeks ended January 2, 2016. These can be found on SEDAR (www.sedar.com) or the company’s website. Review the principal statements and the no

> Duster Corporation is a private company with a defined benefit pension plan. The following information is available for Duster Corporation for 2017: Opening balance, DBO……………………………………………………………….$210,000 Opening balance, plan assets……………………………………………………….

> Access the annual report, including the audited financial statements, of Thomson Reuters Corporation for the year ended December 31, 2014 from SEDAR (www.sedar.com) or from the company’s website (www.thomsonreuters.com). Instructions: (a) What related-p

> Jonquière Corporation provides the following information about its defined benefit pension plan (in hundreds of thousands of dollars) for 2017: At the end of the year, Jonquière revised the terms of its pension plan, which resul

> At December 31, 2017, Glover Corporation provided you with the following information: Defined benefit obligation, December 31, 2017……………………………………$3,400,000 Plan assets at fair value, December 31, 2017…………………………………………..2,420,000 Past service c

> Refer to the information for Maya Corp. in BE19-4, and provide a continuity schedule for the plan assets for the year. Is the plan in a surplus or a deficit position at the end of the year? Data from BE19-4: Maya Corp. reports the following information

> For Castor Corporation, year-end plan assets were $1,753,000. At the beginning of the year, plan assets were $1,359,000. During the year, contributions to the pension fund were $170,000, while benefits paid were $130,000. Calculate Castor’s actual return

> Maya Corp. reports the following information (in hundreds of thousands of dollars) to you about its defined benefit pension plan for 2017: Provide a continuity schedule for the DBO for the year. Maya follows IFRS. $ 32 Actual return on plan assets

> Tika Corp. has recently decided to implement a pension plan for its employees; however, it is unsure if it would like to structure the pension as a defined contribution plan or a defined benefit plan. As requested by management, prepare a short memo outl

> Explain what performance-type plans are and how they differ from other types of compensatory plans.

> Using the information from BE18-3, prepare Nilson’s journal entry to record 2017 income tax. Assume a tax rate of 25% and that Nilson uses the taxes payable method of accounting for income taxes under ASPE. Data from BE18-3: Nilson Inc. had accounting

> Sonia Corporation has historically followed ASPE, but is considering a change to IFRS. It has temporary differences at December 31, 2017 that result in the following statement of financial position future income tax accounts: Deferred tax liability, cur

> IAS 19 Employee Benefits requires companies that have a surplus in a defined benefit plan to perform a “ceiling test” on the net benefit asset account. Instructions: Explain what an asset ceiling test is, why it is required, and how it is applied.

> Alliance Inc. reports the following incomes (losses) for both book and tax purposes (assume the carryback provision is used where possible): The tax rates listed were all enacted by the beginning of 2014. Instructions: (a) Prepare the journal entries

> Weiss Inc. reported income from continuing operations of $87,000 and a loss from discontinued operations of $16,000 in 2017, all before income taxes. All items are fully taxable and deductible for tax purposes. Prepare the bottom of the income statement

> Sandeep Corporation had income before income tax of $230,000 in 2017. Sandeep’s current tax expense is $43,000, and deferred tax expense is $27,000. (a) Prepare Sandeep’s 2017 income statement, beginning with income before income tax. (b) Calculate Sande

> In 2017, Borovya Limited purchased shares of Gurvir Corp. at a cost of $52,000. This was the first time the company had ever acquired an investment to be accounted for at fair value through other comprehensive income (FV-OCI). At December 31, 2017, the G

> Ditek Corp. provides a defined contribution pension plan for its employees. The plan requires Ditek to contribute 5% of employees’ gross pay to a fund trustee each year. Ditek’s total payroll for 2017 was $2,735,864. At the start of 2017, Ditek revised t

> At December 31, 2017, Tapper Corporation has a deferred tax asset of $420,000. After a careful review of all available evidence, it is determined that it is more likely than not that $85,000 of this deferred tax asset will not be realized. Prepare the ne

> Use the information for Kyle Inc. given in BE18-16. Assume now that Kyle earns taxable income of $25,000 in 2018 and that at the end of 2018 there is still too much uncertainty to recognize a deferred tax asset. Prepare all the journal entries that are n

> Refer to BE19-16 and Saver Corporation’s single-person defined benefit pension plan. If the change in the January 1, 2017 defined benefit obligation had been the result of an actuarial revaluation instead of a plan amendment, (a) determine the effect tha

> Saver Corporation ended its previous fiscal year with a defined benefit obligation of $137,888 and plan assets of $140,000. On January 1, 2017, the company amended its one-person defined benefit pension plan, resulting in a revised defined benefit obliga

> Legacy Corporation has the following information available concerning its post-retirement benefit plan for 2017: Current service cost……………………………………………………………………$130,000 Interest cost on DBO, discount rate at 6%............................................

> Petra Ltd. is preparing its financial statements for its year ended December 31, 2017 and has just obtained an actuarial pension valuation as at its year-end date. Prior to the actuarial valuation, Petra determined, based on the individual components of

> At the end of 2016, Valerie Corporation reported a deferred tax liability of $41,000. At the end of 2017, the company had $241,000 of temporary differences related to property, plant, and equipment. Depreciation expense on this property, plant, and equip

> The following is Mann Corp.’s comparative statement of financial position at December 31, 2017 and 2016, with a column showing the increase (decrease) from 2016 to 2017: Additional information: 1. On December 31, 2016, Mann acquired 2

> Instructions: Research what Canadian companies have been doing in recent years in response to rising post-employment health care costs and the risks that are associated with defined benefit pension plans. Write a short report on your findings.

> Monday Corporation sponsors a defined benefit pension plan and reports under IFRS. On January 1, 2017, the company reported plan assets of $1,000 and a defined benefit obligation of $1,100 (all amounts in thousands of dollars). During 2017, the current s

> Refer to the data provided about Rui Corporation’s pension plan in BE19-11. Prepare a pension work sheet for Rui Corporation for 2017 assuming the company applies ASPE. Data from BE19-11: At January 1, 2017, Rui Corporation had plan assets of $250,000

> At January 1, 2017, Rui Corporation had plan assets of $250,000 and a defined benefit obligation of the same amount based on projected costs. During 2017, the current service cost was $27,500, the discount rate on the DBO and plan assets was 10%, actual

> Refer to the data for Duster Corporation’s defined benefit pension plan in BE19-9. Now assume that the company follows ASPE instead of IFRS. Determine the 2017 effect of the pension plan on pension expense and the company’s shareholders’ equity. Data fr

> Scott Enterprises Inc. sponsors a defined benefit plan for its 500 employees. On December 31, 2017, the company’s actuary provided the following information related to the plan: defined benefit obligation $11.3 million, and fair value of plan assets $9 m

> Using the information from BE18-5, and assuming that the $40,000 difference is the only difference between Mazur’s accounting income and taxable income, prepare the journal entries to record the current tax expense, deferred tax expense, income tax payab

> At December 31, 2017, Watzman Inc. owned equipment that had a book value of $178,000 and a tax base of $136,000 due to the use of different depreciation methods for accounting and tax purposes. The enacted tax rate is 30%. Calculate the amount that Watzm

> Myers Corp. purchased depreciable assets costing $30,000 on January 2, 2017. For tax purposes, the company uses CCA in a class that has a 30% rate. For financial reporting purposes, the company uses straight-line depreciation over five years. The enacted

> Using the information from BE18-3, calculate the effective rate of income tax for Nilson Inc. for 2017. Also make a reconciliation from the statutory rate to the effective rate, using percentages. Data from BE18-3: Nilson Inc. had accounting income of

> Many business organizations have been concerned with providing for employee retirement since the late 1800s. During recent decades, a marked increase in this concern has resulted in the establishment of private pension and other post-retirement benefit p

> Mazur Corp. follows IFRS and began operations in 2017 and reported accounting income of $275,000 for the year. Mazur’s CCA exceeded its book depreciation by $40,000. Mazur’s tax rate for 2017 and years thereafter is 30%. In its December 31, 2017 statemen

> Potash Corporation of Saskatchewan Inc., Loblaw Companies Limited, and Air Canada are all Canadian companies with defined benefit plans. Visit www.sedar.com to access financial statements for their 2014 fiscal years ended December 31, 2014, January 3, 20

> The following information is available for Roginski Corporation for 2017. 1. CCA reported on the 2017 tax return exceeded depreciation reported on the income statement by $160,000. This difference is expected to reverse in equal amounts of $40,000 per ye

> In 2017, Noshy Corporation had accounting income of $234,000 and taxable income of $184,000. The difference is due to the use of different depreciation methods for tax and accounting purposes. The tax rate is 25%. Calculate the amount to be reported as i

> Use the information for Kyle Inc. given in BE18-16, but assume instead that it is more likely than not that the entire tax loss carryforward will not be realized in future years. Prepare all the journal entries that are necessary at the end of 2017 assum

> Kyle Inc. incurred a net operating loss of $580,000 in 2017. Combined income for 2014, 2015, and 2016 was $460,000. The tax rate for all years is 30%. Prepare the journal entries to record the benefits of the carryback and the carryforward, assuming it i

> Roper Corporation had the following tax information: In 2017, Roper suffered a net operating loss of $550,000, which it decided to carry back. The 2017 enacted tax rate is 25%. Prepare Roper’s entry to record the effect of the loss ca

> At December 31, 2016, Palden Corporation had a deferred tax asset of $800,000, resulting from future deductible amounts of $3.2 million and an enacted tax rate of 25%. In May 2017, new income tax legislation is signed into law that raises the tax rate to

> Powell Corporation has a taxable temporary difference related to net book value versus UCC of $715,000 at December 31, 2017. This difference will reverse as follows: 2018, $53,000; 2019, $310,000; and 2020, $352,000. Enacted tax rates are 25% for 2018 an

> Khan Limited is a publicly traded company on the Toronto Stock Exchange. The company sponsors a defined benefit pension plan for all of its employees, and the controller provides you with the following data that relate to the plan for fiscal 2017: 1. The

> At December 31, 2016, Ambuir Corporation had a deferred tax liability of $35,000. At December 31, 2017, the deferred tax liability is $52,000. The corporation’s 2017 current tax expense is $53,000. What amount should Ambuir report as total 2017 income ta

> At December 31, 2016, Chai Inc. had a deferred tax asset of $40,000. At December 31, 2017, the deferred tax asset is $62,000. The corporation’s 2017 current tax expense is $70,000. What amount should Chai report as total 2017 income tax expense? Prepare

> Obtain the financial statements of the Canadian National Railway Company for its year ended December 31, 2014 from SEDAR (sedar.com) or the company’s website. Instructions: Review the information contained in the “Additional Disclosures” section of Not

> At December 31, 2017, Camille Corporation had an estimated warranty liability of $256,000 for accounting purposes and $0 for tax purposes. (The warranty costs are not deductible until they are paid.) The tax rate is 25%. Calculate the amount that Camille

> Faber Corporation is a young start-up technology company with steadily increasing sales in its first six months of operations. Faber’s head office is located in a country in Eastern Europe, where the company would be subject to a corporate income tax rat

> Bantec Corporation had 500,000 common shares outstanding on January 1, 2017. On May 1, Bantec issued 50,000 shares. (a) Calculate the weighted average number of shares outstanding for the year ended December 31, 2017 if the 50,000 shares were issued for

> Assume the same information as in BE17-6 except that on October 1, 2017, Laurin declared a 1-for-2 reverse stock split instead of a 10% stock dividend. Data from BE17-6: Laurin Limited had 42,000 common shares outstanding on January 1, 2017. On March 1

> Assume the same information as in BE17-6 except that on October 1, 2017, Laurin declared a 3-for-1 stock split instead of a 10% stock dividend. Data from BE17-6: Laurin Limited had 42,000 common shares outstanding on January 1, 2017. On March 1, 2017,

> Laurin Limited had 42,000 common shares outstanding on January 1, 2017. On March 1, 2017, Laurin issued 20,000 shares in exchange for equipment. On July 1, Laurin repurchased and cancelled 10,000 shares. On October 1, 2017, Laurin declared and issued a 1

> Dencil Corporation had 600,000 common shares outstanding on January 1, 2017. On March 1, 2017, Dencil issued 150,000 shares. On September 1, Dencil repurchased and cancelled 50,000 shares. Calculate Dencil’s weighted average number of shares outstanding

> Josit Ltd. initiated a one-person pension plan in January 2012 that promises the employee a pension on retirement according to the following formula: pension benefit = 2.5% of final salary per year of service after the plan initiation. The employee began

> Assume the same information for Hedley Corporation as in BE17-2 except that the preferred shares are cumulative and the dividends have not yet been declared or paid. Data from BE17-2: Hedley Corporation had 2017 net income of $1.4 million. During 2017,

> Assume the same information for Hedley Corporation as in BE17-2 except that the preferred shares are non-cumulative and the dividend has not been declared or paid. Data from BE17-2: Hedley Corporation had 2017 net income of $1.4 million. During 2017, H

> Flory Corporation is a rapidly growing privately owned company that is considering changing from ASPE to IFRS in order to prepare for a future public offering of shares. As Flory’s financial advisor, what advice would you give to management regarding EPS

> BCE Inc.’s accounting policy note and its note disclosures relating to the company’s pension and other post-employment benefits for the year ended December 31, 2014 are set out in the chapter. Instructions: Review the disclosures from BCE’s 2014 financi

> Rhonda is considering investing in the shares of either East Corporation or West Ltd. Both companies are publicly traded. How would an analysis of each company’s EPS help Rhonda decide which company to add to her investment portfolio?

> Assume the same information as in BE17-20 except that the put options allow the holder to sell Redpath’s shares to Redpath at $6 each. How should these options be treated when calculating the diluted EPS? Data from BE17-20: Use the same information as

> Assume the same information as in BE17-19 except that Redpath purchased put options to give it the option of selling 25,000 of its own common shares for $5 each. How should the options be treated when calculating the diluted EPS? Data from BE17-19: Red

> Use the same information as in BE17-19 and assume that Redpath also wrote put options that allow the holder to sell 25,000 of Redpath’s shares to Redpath at $8 per share. Calculate the incremental shares outstanding for Redpath Limited. Data from BE17-1

> Hedley Corporation had 2017 net income of $1.4 million. During 2017, Hedley paid a dividend of $5 per share on 100,000 preferred shares. Hedley also had 220,000 common shares outstanding during the year. Calculate Hedley’s 2017 earnings per share.

> Redpath Limited purchased 25,000 call options during the year. The options give the company the right to buy its own common shares for $4 each. The average market price during the year was $7 per share. Calculate the incremental shares outstanding for Re

> Ad Venture Ltd. provides a defined contribution pension plan for its employees. Currently, the company has 40 full-time and 55 part-time employees. The pension plan requires the company to make an annual contribution of $2,000 per full-time employee, and

> Next Generation Corporation (a private company) has preferred shares outstanding, which require Next Generation to redeem the shares for cash at an amount equal to the fair value of the company’s business assets at the time of issuance of the preferred s

> Strait Inc. has 300,000 common shares outstanding throughout the year. On June 30, Strait issued 10,000 convertible preferred shares that are convertible into two common shares each. Calculate the weighted average number of common shares to use in calcul

> Assume the same information as in BE17-15 except that Melanie reported net income of $350,000 in 2017. Calculate Melanie’s 2017 diluted earnings per share. Data from BE17-15: Melanie Corporation reported net income of $550,000 in 2017 and had 900,000 c

> Melanie Corporation reported net income of $550,000 in 2017 and had 900,000 common shares outstanding throughout the year. On May 1, 2017, Melanie issued 5% convertible bonds. Each $1,000 bond is convertible into 120 common shares. Total proceeds at par

> LGS Inc. is a private company. You have recently been hired as the CFO for the company and are currently finalizing the company year-end report for December 31, 2017. The company has an option to follow either IFRS or ASPE, and has not yet made the choic

> J. J. Kersee Corporation, a Canadian publicly traded company, is currently preparing the interim financial data that it will issue to its shareholders and the securities commission at the end of the first quarter of its December 31, 2017 fiscal year. Ker

> Assume the same information as in BE17-13 except that the 10% bonds are convertible into 10,000 common shares. Calculate Thiessen’s 2017 diluted earnings per share. Data from BE17-13: Thiessen Corporation earned net income of $300,000 in 2017 and had 1

> Thiessen Corporation earned net income of $300,000 in 2017 and had 100,000 common shares outstanding throughout the year. Also outstanding all year was $800,000 of 10% bonds that are convertible into 26,000 common shares. Thiessen’s tax rate is 25%. Calc

> Milliken Corporation reported net income of $700,000 in 2017 and had 115,000 common shares outstanding throughout the year. Also outstanding all year were 9,500 of cumulative preferred shares, with each being convertible into two common shares. The prefe

> Francine Limited was incorporated with share capital consisting of 100,000 common shares. In January 2017, it issued 20,000 mandatorily convertible preferred shares. The terms of the prospectus for the issuance of the preferred shares require the convert

> Mila Enterprises Ltd. provides the following information about its defined benefit pension plan: Instructions: (a) Calculate the January 1, 2017 balances for the pension-related accounts if Mila follows IFRS. (b) Prepare the required disclosures that w

> Ethan Corporation had 100,000 common shares outstanding on December 31, 2016. During 2017, the company issued 12,000 shares on March 1, retired 5,000 shares on July 1, issued a 20% stock dividend on October 1, and issued 18,000 shares on December 1. For

> The 2017 income statement of Tanel Corporation showed net income of $860,000, which included a loss from discontinued operations of $140,000. Tanel had 25,000 common shares outstanding all year. (a) Calculate earnings per share for 2017 as it should be r

> Milano Ltd. issued 1,000 preferred shares for $10 per share. The preferred shares pay an annual, cumulative dividend of $0.50 per share, and become mandatorily redeemable if net income drops below $500,000 in any fiscal year. Discuss how Milano Ltd. shou

> Verhage Limited, a private company that complies with accounting standards for private enterprises (ASPE), has redeemable preferred shares outstanding that carry a dividend of 5%. If the shares are not redeemed within five years, the dividend will double

> Jamieson Limited, a publicly accountable enterprise, issued bonds that will not be due until 2114. The bonds carry interest at 5%. Explain how this instrument should be presented on the statement of financial position.

> On January 1, 2017, Wolfgang Ltd. paid $1,000 for the option to buy 5,000 of its common shares for $25 each. The contract stipulates that it may only be settled by exercising the option and buying the shares. How should this be accounted for in the finan

> Different countries have different statutory tax rates. Instructions: Choose an industry and select five companies that operate in different countries. Access these companies’ most recent annual financial statements and make note of their statutory and

> Refer to BE16-4. Assume the same facts except that the forward contract is a futures contract that trades on the Futures Exchange. Ginseng Inc. was required to deposit $30 with the stockbroker as a margin. Prepare the journal entries to update the books

> On January 1, 2017, Ginseng Inc. entered into a forward contract to purchase U.S. $6,000 for $6,336 Canadian in 30 days. On January 15, the fair value of the contract was $40 (reflecting the present value of the future cash flows under the contract). Ass

> On February 1, 2017, Daily Produce Ltd. entered into a purchase commitment contract to buy apples from Farmers Corporation. According to the contract, Daily Produce could settle the contact on a net basis; however, Daily Produce intends to take delivery

> The following is partial information related to Siri Ltd.’s non-pension, post-retirement health care benefit plan at December 31, 2017: Defined post-retirement benefit obligation, accounting basis………………..$185,000 Plan assets (at fair value)…………………………………