Hyperchip Limited is a private corporation reporting under ASPE. At December 31, 2021, its general ledger contained

Question:

Hyperchip Limited is a private corporation reporting under ASPE. At December 31, 2021, its general ledger contained the following summary data:

Cost of goods sold ..................................... $ 950,000
Net sales ..................................................... 1,425,000
Operating expenses ..................................... 270,000
Other expenses .............................................. 30,000
Other revenues .............................................. 45,000
Retained earnings, December 31, 2020 ... 1,150,000

Additional information:

1. In 2021, common share dividends of $80,000 were declared on June 23 and December 28. The dividends were paid on July 9, 2021, and January 9, 2022, respectively.

2. The company’s income tax rate is 20%.

Instructions

a. Record the dividend transactions in 2021.

b. Prepare a multiple-step income statement for 2021.

c. Prepare a statement of retained earnings for 2021.

Taking It Further

If this company were following IFRS, what statement would have to be prepared instead of the statement of retained earnings?

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...

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