1.Trius Inc. borrowed $2,500,000 from its bank on December 1, 2013. The term is 10 years, with annual payments of $250,000 plus interest due starting December 1, 2014. If Trius does not meet certain loan covenants the entire amount outstanding is due on demand. Trius was not in compliance at December 31, 2015 (year-end). After considerable negotiations, the bank agreed it would not demand payment. The agreement was signed January 20, 2016. Trius Inc. issued its audited financial statements on January 30, 2016. How should Trius report the bank loan (Trius follows IFRS. Assume December 2014 payment made)?

A $250,000 - current liability; $2,000,000 -long-term liability

B $2,250,000 - long-term liability

C $2,250,000 - current liability

D $500,000 - current liability; $1,750,000 - long-term liability

2.When an organization incurs a liablity for a lease but does not report that liability on the Balance Sheet the organization is using _______________________

A Accrual basis of accounting

B Cash basis of accounting

C Leveraged financing

D Off-balance sheet financing

3. Aye Corp. was organized on January 2, 2014 with authorized capital of 1,000,000 no par common shares. The initial share issue on February 1, 2014 was done at $10 per share. On March 1, 2014, Ayes corporate lawyer accepted 7,000 common shares (fair value - $85,000) in settlement of legal services. Aye Corp.s shareholders equity will increase as the result of the payment to the lawyer. [CPA adapted]

True/False?

4. Clos Ltd. engaged RBC Dominion Securities as the lead underwriter on a bond issue. If the agreement states RBCDS will underwrite the bonds on a best efforts basis, Clos will receive the net bond proceeds on the date the agreement is signed.

True/ False?

5.On August 1, 2014, Coffin Ltd. borrowed $2,400,000 from Ridge Bank. The loan carries an interest rate of 5% and requires four annual payments plus interest beginning August 1, 2015. Coffee made the first payment on August 1, 2015. What is the amount of interest payable at December 31, 2015? [CPA Adapted]

A $120,000

B $90,000

C $50,000

D $37,500

6.. In which of the following situations would you NOT recognize a contingent liability (assume all the criteria for recognizing a contingency under IFRS are met)?

A The threat that assets will be expropriated by a foreign government

B Recent lawsuits against Volkswagen related to compliance with emission requirements

C Holdco Inc. guaranteed the debt of one of its subsidiary companies - BCo Ltd.

D Notification from the company tax accountant that a substantial income tax refund will be forthcoming