1.

On December 31, 2019, Shoreline Hotel Inc.., reported its shareholders' equity as follows:

Common shares, no par value, authorized 200,000 shares

issued and outstanding 120,000 shares $1,350,000

Retained earnings 700,000

Total shareholders' equity $2,050,000

On January 1, 2020, it declared a 10% stock dividend on its common shares when the market value of the common shares was $22 per share before market adjustment (ie: prior to ex-dividend value).

What was the effect on Shorelines retained earnings as a result of the above transaction?

Select one:

a.

$264,000 decrease .

b.

$135,000 decrease .

c.

$400,000 increase.

d.

$240,000 increase.

e.

None of the above answers.

2.

Toiz-4-Boiz [T-4-B] is a manufacturer of electronic game hardware and game software.The company issued subscriptions for 250,000 no par value common shares at an issue price of $24 per share on March 1, 2018. The issue terms called for a 20% payment on application, a second instalment of 25% payable two months later and the balance due on demand at the companys discretion. Similar shares were being traded at $28 on March 1. The journal entry to record the issue of subscriptions and deposit receipt would be

Select one:

a.

DR Share Subscriptions Receivable $5,600,000; .DR Cash 1,400,000; CR Common Shares Subscribed $7,000,000.

b.

DR Share Subscriptions Receivable $5,600,000; .DR Cash 1,400,000; CR Common Shares Capital $7,000,000.

c.

DR Cash 1,400,000; CR Common Shares Capital $1,400,000.

d.

DR Share Subscriptions Receivable $4,800,000; .DR Cash 1,200,000; CR Common Shares Subscribed $6,000,000.

e.

None of the above entries.

3.

he Las Vegas Bank of Canada [LVC] grants its executives each year with stock options as performance bonuses. On January 1, 2019, it issued 180,000 such stock options. Each option gave the holder the right to sell to LVC, one share of the Bank at the option price of $74 per share. None of these options have yet been exercised throughout 2019. Assume the average market price of LVC's common shares during 2019 was $40. Using the reverse treasury stock method, (i.e., cash out/cash in), what is the income impact and the number of shares that the Bank would use to calculate the diluted earnings per share for 2019?

Select one:

a.

$3,060,000 loss and 180,000 shares.

b.

$3,060,000 loss and 333,000 shares.

c.

$0 and 153,000 shares.

d.

$0 and 333,000 shares.

e.

None of the above answers are correct.