56.Johannesburg Corp. has two issues of securities outstanding: no par value common shares and 8% convertible bonds with a par value of $8,000,000. Bond interest payment dates are June 30 and December 31. The conversion clause in the bond indenture entitles the bondholders to receive 40 common shares in exchange for each $1,000 bond. The value of the equity portion of the bond issue is $60,000. On June 30, 2017, the holders of $1,200,000 par value bonds exercise the conversion privilege. The market price of the bonds on that date is $1,100 per bond and the market price of the […]

  Problem B-6Gross Profit Method On December 31, 2017, the entire inventory of Clementine Corp.was destroyed by a flood. Sales and purchases for the year had been $2.6 million and $1.2 million, respectively. The beginning inventory (Jan 1, 2017) was $450,000.In the past,Clementine’s gross profit has averaged 40%.Clementine uses the periodic inventory system. Instructions a.Calculate the estimated cost of inventory destroyed. b.Preparejournal entries at December 31, 2017 to close the sales and related cost of goods sold accounts. *Problem B-7 Bank Reconciliation Following is the general format of a bank reconciliation with the various categories numbered (1) through (4). Balance […]

Pr. 13-86Warranties Alaska Computer Company sells computers for $2,000 each, which includes a 3-year warranty that requires the company to perform periodic services and to replace defective parts. During 2017, Alaska sold 500 computers on account. Based on past experience, the company has estimated the total 3-year warranty costs at $80 for parts and $100 for labour. (Assume sales all occur at December 31, 2017.) In 2018, Alaska Computer Company incurred actual warranty costs relative to 2014 computer sales of $10,000 for parts and $12,000 for labour. Instructions a)Using the expense warranty approach, prepare the entries to reflect the above […]

21.A troubled debt restructuring will generally result in a a) loss by the debtor and a gain by the creditor. b) loss by both the debtor and the creditor. c) gain by both the debtor and the creditor. d) gain by the debtor and a loss by the creditor. 22.In a troubled debt restructuring in which the debt is settled by a transfer of assets with a fair market value less the carrying amount of the debt, the debtor would a) not recognize a gain or loss on the settlement. b) recognize a gain on the settlement. c) recognize a […]

21.Which of the following is generally NOT used as a basis for calculating bonuses or profit-sharing amounts? a) a percentage of the employees’ regular pay rates b) the company’s pre-tax income c) productivity increases d) gross sales 22.Under IFRS, a provision is a) a special fund set aside to pay long-term debt. b) unearned revenue. c) a liability of uncertain timing or amount. d) an allowance for future dividends to be paid. 23.At the time of recognition of an asset retirement obligation, the present value should be a) recorded as a separate long-term asset and as an asset retirement obligation. […]