University of Toronto Weighted Average Journal Entries & Common Shares Problems Paper Please see attached pictures eight questions -problems . Please make

University of Toronto Weighted Average Journal Entries & Common Shares Problems Paper Please see attached pictures eight questions -problems . Please make sure to show all necessary calculations . Fifo, weighted average, journal entries, common shares, preferred shares, dividends, bonds PROBLEM 1 -(15 MARKS)
Bush Corporation began operations on December 1, 2010. The only inventory
transaction in 2010 was the purchase of inventory on December 10, 2010, at a cost of
$20 per unit. None of this inventory was sold in 2010. Relevant information for fiscal
2011 is as follows:
Ending inventory units:
December 31, 2010
December 31, 2011, by purchase date
December 2, 2011
July 20, 2011
30 130
During 2011, the following purchases and sales were made:
Mar. 15
July 20
Sept. 4
Dec. 2
300 units at $24
300 units at $25
200 units at $28
100 units at $30
Apr. 10
Aug. 20
Nov. 18
Dec. 12
The company uses the periodic inventory system.
1. Determine ending inventory in dollars and units under
a. Specific Identification
b. FIFO, and
c. Weighted Average.
2. Assuming this company uses a perpetual inventory system
determine ending inventory in dollars and units for moving
weighted average.
Page 1 of 7
Jordan Corporation has the following securities in its long-term investment portfolio
accounted for at fair value through other comprehensive income (FV-OCI) on December
31, 2013
Cost and Carrying Amount
2,000 shares of Bond Inc. common $ 40,000
6,000 shares of Cross Corp common 240,000
800 shares of Oz Inc. preferred
$ 340,000
Fair Value
$ 38,000
All the investments were purchased in 2013. Jordan follows a policy of capitalizing
transaction costs on the acquisition of FV-OCI investments and reducing the proceeds
on disposal. Jordan Corp. follows IFRS and applies the FV-OCI model without
In 2014, Jordan completed the following transactions:
Mar. 1 Sold the 2,000 shares of Bond Inc, common at $18 per share, less fees of $80
Apr. 1 Bought 1,000 shares of Bored Corp. common at $75 per share, plus fees of
Jordan Corporation’s portfolio appeared as follows on December 31, 2014:
Carrying Amount
1,000 shares of Bored Corp. common $ 76,300
6,000 shares of Cross Corp common 216,000
800 shares of OZ Inc. preferred
$ 353,900
Fair Value
$ 74,000
Prepare the journal entries for Jordan for:
a) The 2013 valuation adjusting entry
b) The sale of the Bond Inc. shares
c) The purchase of the Bored Corp. shares
d) The 2014 valuation adjusting entry
Problem 3 (20 Marks)
Jackson Inc. is authorized to issue an unlimited number of common shares and 100,000
shares of non-cumulative preferred. The company completed the following
Feb 5
Issued 70,000 common shares for $24 cash.
Gave the corporation’s promoters 3,750 common shares for their services
in organizing the corporation. The directors valued the services at
Issued 44,000 common shares in exchange for the following assets with
the indicated reliable market values: Land, $ 192,000; buildings, $504,000;
and machinery, $372,000.
Closed the Income Summary account. A $64,800 loss was incurred.
Mar 3
Dec 31
Jan 28 Issued for cash 4,000 preferred shares at $240 per share.
Dec 31 Closed the income Summary account. A $235,200 net income was
Jan 1 The board of directors declared a $24 per share cash dividend to
preferred shares and $0.48 per share cash dividend to outstanding
common shares, payable on February 5 to the January 24 shareholders of
Feb 5 Paid the previously declared dividends.
Dec 31 Closed the Cash Dividends and Income Summary Accounts. A $381,600
net income was earned.
1. Prepare General Journal entries to record the transactions. (17 Marks)
2. Prepare a statement of changes in equity for the year ended December 31,
2014. (3 Marks)
Problem 4 (10 Marks)
The income statement, Balance Sheet, and additional data of Flashpoint Consulting Ltd.
Flashpoint Consulting Ltd.
Income Statement
For the Year Ended September 30, 2014
Consulting Revenue
Salaries Expense
Amortization Expense
Rent Expense
Office Supplies Expense
Insurance Expense
Interest Expense
Income Tax Expense
Net Income
Flashpoint Consulting Ltd.
Partial Balance Sheet
September 30, 2014 and 2013
Current Assets:
Accounts Receivable
Office Supplies
Prepaid Expenses
Current Liabilities
Accounts Payable
Accrued Liabilities
$ 36,000
$68,000 $ 56,000
38,000 42,000
Additional Data
a) Acquisition of computer equipment is $232,000. Of this amount, $202,000 was
paid in cash, $30,000 by signing a long-term note payable. Flashpoint consulting
Ltd. Sold no computer equipment during fiscal year 2014.
b) Cash received from sale of land $20,000.
c) Cash received from issuance of common shares, $84,000.
d) Payment of long-term note payable, $40,000.
e) Payment of cash dividends, $130,000.
Prepare Flashpoint Consulting Ltd.’s cash flow statement for the year ended
September 30, 2014, using the indirect method.
Page 4 of 7
Problem 5 (11 Marks)
On December 31, 2015, when the market rate was 8%, Bones Corp purchased
$500,000, 10%, 5-year bonds. Interest is payable semi-annually on June 30 and
December 31. The corporation uses the effective interest method of amortizing bond
premiums or discounts.
1. Prepare an amortization schedule for the first five payment periods. Round
all amounts to the nearest whole dollar. (5 Marks)
2. Prepare the journal entry at December 31, 2015 to record the purchase of
the bonds. (2 Marks)
3. Prepare the journal entry at the first interest receipt, June 30, 2016. (3
Problem 6 (10 Marks)
Boyd Tours Inc. reported $1,600,000 of net income for 2016. On
December 1, it declared and paid the annual preferred dividends of
$200,000. On January 1, 2014, Boyd had 100,000 and 300,000
outstanding preferred and common shares, respectively. The following
transactions changed the number of shares outstanding during the year:
Feb 1
Apr 30
May 1
Oct 31
Declared and issued a 10% common share dividend.
Sold 120,000 common shares for cash.
Sold 40,000 preferred shares for cash.
Sold 100,000 common shares for cash.
1. What is the amount of net income available for distribution to
common shareholders? (2 Marks)
2. Calculate the weighted average number of common shares for
the year. (6 Marks)
3. Calculate the Earnings per share for the year. (2 Marks)

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