. FNR Inc. has 100,000 common shares outstanding with the related balance in the common shares account being $2,000,000.

The balance in the contributed surplus common share repurchases account is $180,000 and in the contributed surplus preferred shares account is $50,000. During 20X5, FNR repurchased 30,000 common shares for $900,000.

What amount would be debited to retained earnings as part of the entry made to recognize this transaction?

a) $0

b) $70,000

c) $120,000

d) $300,000

2. On July 2, 20X4, a publicly accountable entity provided a share appreciation rights (SARs) plan to its employees. A total of 3,000 SARs were awarded. The vesting period expires on July 2, 20X6. The fair value per SAR was $5.80 on July 2, 20X4. The company's year end is December 31.

At December 31, 20X4, the entity estimated that 80% of the SARS would vest. The fair value per SAR was $6.75.

At December 31, 20X5, the entity estimated that 75% of the SARS would vest. The fair value per SAR was $5.25.

What is the compensation expense for the year ended December 31, 20X5?

a) $3,713

b) $4,809

c) $6,308

d) $6,750

3. On November 16, 20X3, QNR Inc. declared a cash dividend of $960,000 payable on December 1, 20X3. QNR's capital structure consists of the following:

200,000 common shares

50,000 cumulative preference shares Series A; entitled to an annual dividend of $3

50,000 non-cumulative preference shares Series B; entitled to an annual dividend of $5

Dividends were last paid on December 5, 20X1.

How much of the dividends declared will be paid on the common shares on December 1, 20X3?

a) $160,000

b) $410,000

c) $560,000

d) $640,000

4. On December 31, 20X0, a publicly accountable entity issued $20,000,000, 5%, 10-year convertible bonds for total cash proceeds of $21,650,000. The bonds pay interest semi-annually on June 30 and December 31 each year. The entity incurred a total of $250,000 in transaction costs related to the bond issue (these are not included in the cash proceeds of the bonds). Bonds of similar risk would have yielded 5.4%. Interest rates should be rounded to five decimal places, for example, X.XXXXX%.

What is the total interest expense on these bonds for the six months ended June 30, 20X1?

a) $517,594

b) $523,477

c) $531,825

d) $532,784

5. On January 1, 20X2, Cuppa Corp. granted 1,000 stock options to each of its 300 employees. The options have a three-year vesting period. At the grant date, the fair value of each option was $2.80. Additional information:

At the end of 20X2, 20 employees have left and Cuppa estimates that an additional 75 will leave in the next two years.

During 20X3, 30 employees leave and Cuppa estimates that another 50 will leave in the next year.

During 20X4, 35 employees leave.

Cuppa follows IFRS and has a December 31 year end.

What amount of compensation expense will Cuppa recognize in 20X3, related to these options?

a) $182,000

b) $228,667

c)$280,000

d) $373,333