293 sample final 1

293 sample final 1 - Comm 293 Practise Questions April 8th...

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Comm 293 Practise Questions April 8 th Session Scott Sinclair’s Section 204 Question 1 –Share transactions (25 minutes) Boot Camp Inc. was incorporated a few years ago. The main shareholder, who used to be the sole proprietor prior to Boot Camp Inc. being incorporated, was reviewing some income statements for the earlier proprietorship and is confused about some expenses that are present on Boot Camp Inc.’s income statement but were not on the proprietorship’s income statement. a) Specify two expenses that are usually on an incorporated business’s income statement but are not on a proprietorship’s income statement and briefly explain why each is absent from the proprietorship’s income statement. (4 marks) i. First expense: _________________________________________ Why absent? _________________________________________ ii. Second expense: _______________________________________ Why absent? ___________________________________________ b) Shareholders have certain rights as owners of a corporation. These rights may differ depending on the type of shares purchased. Required: List and briefly discuss the general rights of a common shareholder. (4 marks) 1
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Question 1 –Share transactions (25 minutes) continued a) Identify three requirements that normally must be satisfied before the declaration of a cash dividend. (3 marks) ! ! ! b) On December 31, 2004 Canadian Cheese Company had the following shareholders’ equity balances: Preferred shares- $5 cumulative redeemable preferred shares, 250,000 authorized, 30,000 issued and outstanding $ 2,400,000 (1 year of dividends in arrears) Common shares- unlimited authorized, 225,000 issued $ 1,125,000 Retained earnings $ 750,000 $ 4,275,000 The following transactions took place in 2005: i) On January 12, 2005, 125,000 common shares were issued at $15 each and 25,000 preferred shares at $80 per share. ii)
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293 sample final 1 - Comm 293 Practise Questions April 8th...

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