Reference no: EM132539788
Question 1: Igor Corp. had the following capital transactions during 20X3:
January 1, 20X3 - there were 50,000 common shares outstanding
February 1, 20X3 - issued 20,000 new common shares
May 1, 20X3 - declared and distributed a four-for-one stock split
October 1, 20X3 - repurchased and cancelled 15,000 common shares
December 1, 20X3 - declared and distributed a 20% stock dividend
What is the weighted average number of common shares outstanding (WASO) for the year ended December 31, 20X3?
a) 257,500
b) 267,333
c) 310,000
d) 323,500
Question 2: Stellar Corp. has the following shares issued and outstanding:
300,000 common shares
30,000 9%, Class A non-cumulative preference shares with a par value of $100 each
70,000 6%, Class B cumulative preference shares with a par value of $50 each
Select information is provided below for the year ended July 31, 20X9 :
profit for the year - $4,560,000
dividends on common shares - paid $50,000; declared $80,000
dividends on Class A preference shares - paid $250,000; declared $270,000
dividends on Class B preference shares - paid $420,000; declared $230,000
What amount of profit is attributable to the common shareholders for 20X9?
a) $3,890,000
b) $4,060,000
c) $4,080,000
d) $4,100,000
Question 3: Select financial information for Barbara Inc. for its 20X6 fiscal year is provided below:
Profit for the year is $3,900,000.
Net income attributable to the common shareholders is $3,600,000.
WASO for basic EPS is 2,200,000.
500,000 employee stock options outstanding with an exercise price of $15.00 were issued. Each option allows the holder to purchase 1 common share. The average share price during 20X6 was $25.00
$4,000,000 of 5%, 10-year convertible bonds is outstanding. Before maturity, at the option of the holder, each $1,000 bond is convertible into 45 common shares.
Barbara's corporate tax rate is 25%.
What is the diluted EPS for Barbara for its 20X6 fiscal year?
a) $1.30
b) $1.45
c) $1.47
d) $1.57
Question 4: Which of the following is an example of an error?
Assume the company follows ASPE.
a) Shares classified as fair value through profit or loss (FVPL) and owned at year end were measured at their fair value of $40,000 as at December 31, 20X8, even though the fair value had declined to $25,000 by the date the statements were authorized for issue. b) The company reduced the life of the building when calculating depreciation after it determined that the building should be depreciated over 30 years rather than the 35 years that had been used in prior years.
c) The company had previously used the last in, first out method (LIFO) to cost its inventory and changed to the first in, first out method (FIFO) on a prospective basis.
d) The company changed the accounting for its income taxes from the taxes payable method to the future income taxes method.
Question 5: On January 1, 20X2, Dundas Inc. purchased equipment for $480,000. At the time of purchase, Dundas estimated that the equipment would last eight years and have a residual value of $30,000. Depreciation is being recorded on a straight-line basis and the company has a December 31 year end. In late December 20X6, engineers reassessed the equipment and concluded that it would last five more years (from January 1, 20X6) and have a residual value of $20,000.
What is the correct amount that will be debited to accumulated depreciation in December 20X6 to reflect the above new information if the depreciation expense for 20X6 has already been recorded?
a) $ 9,250
b) $12,000
c) $20,500
d) $25,695