1. Common shares are issued in exchange for a noncash asset. Under IFRS, the noncash asset should be recorded at:

1. The average cost of the common shares in the common shares account
2. The fair market value of the shares
3. The fair market value of the asset acquired
4. The fair market value of the asset acquired or the fair market value of the common shares if the fair market value of the asset cannot be reliably determined

2. What is the cumulative effect of the declaration and payment of a cash dividend on a companys financial statements?

1. To decrease total liabilities and shareholders equity
2. To increase total expenses and total liabilities
3. To increase total assets and shareholders equity
4. To decrease total assets and shareholders equity

3. What is the journal entry to record the issuance of 1,000,000 common shares for $8 each and 250,000, $2.50 preferred shares for $50 each?

1. Cash 8,875,000

Common Shares 8,000,000

Preferred Shares 875,000

2. Cash 8,625,000

Common Shares 8,000,000

Preferred Shares 625,000

3. Cash 8,000,000

Common Shares 8,000,000

4. Common Shares 8,000,000

Preferred Shares 875,000

Cash 8,875,000

4. The liability for a cash dividend is recorded on which of the following dates?

1. Date of record
2. Date of payment
3. Year-end date
4. Date of declaration

5. On January 1^st, 2019, Hanson Corporation has 15,000, $2.60 cumulative preferred shares and 20,000 common shares. Hanson did not pay any dividends during the previous year ended December 31^st, 2018. The company pays $45,000 of dividends during 2019. Which of the following amounts represents the amount of dividends that the preferred shareholders would receive in 2019?

1. $45,000
2. $39,000
3. $15,000
4. $6,000

6. Which of the following best describes the authorized shares of a corporation?

1. They must be recorded in a formal accounting entry
2. They have an effect on both assets and shareholders equity
3. Authorized share capital is required to be shown on a corporations financial statements under both ASPE and IFRS
4. They are indicated in a corporations articles of incorporation

7. What is total shareholders equity based on the following account balances?

Common Shares $450,000

$2.25 Preferred Shares 90,000

Retained Earnings 190,000

Dividends Payable 10,000

1. $740,000
2. $730,000
3. $720,000
4. $640,000

8. Which of the following would result in a credit to retained earnings?

1. Loss for the period
2. Dividend declaration
3. Dividend payment
4. Profit for the period

9. Based on the following information, calculate return on equity ( round to two decimal places ).

Number of Issued Common Shares #30,000

Number of Issued Preferred Shares #100,000

Profit for the year $76,000

Average Shareholders Equity for the year $262,300

1. 2.02
2. 0.29
3. 0.50
4. 3.45

10. Turpin Ltd. reported retained earnings of $725,000 on its March 31, 2019 balance sheet.

It reported a profit of $260,000 for the year ended March 31, 2020. Its retained earnings at March 31, 2020 was $865,000. Which of the following amounts represents the dividends declared by Turpin during the year ended March 31, 2020? ( assume no other effects on retained earnings during the year )

1. $120,000
2. $400,000
3. $465,000
4. $985,000