SOLUTIONS MANUAL FOR ADVANCED ACCOUNTING IN CANADA, 1ST CANADIAN EDITION

SOLUTIONS MANUAL FOR ADVANCED
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ACCOUNTING IN CANADA,1ST
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CANADIANEDITIONBY NATHALIE
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JOHNSTONE AND KRISTIE DEWALD
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TESTBANK|| COMPLETE TEST BANK
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WITH ALL CHAPTERS INCLUDED||
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LATEST AND FULLY COVERED
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VERSION 2025 GRADED A+
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,1 |P a g e
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SOLUTIONSMANUALFORADVANCEDACCOUNTINGINCANADA,1ST m m m m m m m




CANADIAN EDITION BY NATHALIE JOHNSTONE AND KRISTIE DEWALD
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TESTBANK|| COMPLETE TEST BANK WITH ALL CHAPTERS INCLUDED||
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LATESTANDFULLYCOVEREDVERSION2025GRADEDA+
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Chapter01: m




IntroductiontoAdvancedFinancialAccounting m m m m




1.1 DescribetheaccountingstandardsusedinCanadaandhowtheyapplytodifferent m m m m m m m m m m m m




reporting entities.
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1) AprivatecompanyinCanadathatis closelyheld, hasnodebt, andwantsto simplifythe
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accounting process is most likely to report under which part of the CPA Canada Handbook?
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A) Part II—Accounting StandardsforPrivate Enterprises (ASPE)
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B) Part IV— Accounting Standards for Pensions
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C) Part I— International FinancialReporting Standards (IFRS)
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D) PartIII—AccountingStandardsforNot-for-ProfitOrganizationsANSWER:A
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Diff: 1 Type: MC
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TaxonomyCategory: Understanding m m




LearningOutcome:1.1Describetheaccounting standardsused inCanadaand howtheyapplyto
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different reporting entities.
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2) In Canada, a private company has the choice to report under International Financial
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ReportingStandards(IFRS)orAccountingStandardsforPrivateEnterprises(ASPE).Describe why
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the CPA Canada Handbook provides the option for private enterprises?
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ANSWER:IFRSismeanttocreateconsistencyandcomparabilityininternationalmarkets.One ofthe
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limitations ofIFRS is the complexityofreporting forequityinvestments that aremeant to provide
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information to shareholders fordecision-makingpurposes. Manyprivate companies are held by a
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small group of shareholders who are often involved in the running of the business or have access to that
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information. As a result, the cost of applying more complex accounting policies outweighs the benefit
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of the information provided to this closely held group of shareholders. To address this, the Accounting
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Standards Board developed the Accounting
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,2 |P a g e m m m m




Standards for Private Enterprises to meet the needs of private enterprises. Private enterprises havethe
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optiontoadopt IFRSorASPEdepending ontheneedsofthefinancialstatementusers.
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Diff:2 Type: ES m m m




TaxonomyCategory: Understanding m m




LearningOutcome:1.1Describetheaccounting standardsusedinCanadaand howtheyapplyto
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different reporting entities.
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3) WhatarethefourpartsoftheCPACanadaHandbook —Accountingandwhichentities are m m m m m m m m m m m m m m m




they applicable to?
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ANSWER: Thefour parts are: m m m m




• PartI—InternationalFinancialReportingStandards(IFRS)—applicabletopublicly
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accountable, private, or not-for-profit entities.
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• PartII—AccountingStandardsforPrivateEnterprises(ASPE)—applicabletoprivate
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entities.
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• PartIII—AccountingStandardsforNot-for-ProfitOrganizations—applicabletonot- for-
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profit entities. m




• PartIV—AccountingStandardsforPensionPlans—applicabletopensionplans. Diff:
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1 Type: ES
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TaxonomyCategory: Remembering m m




LearningOutcome:1.1Describetheaccounting standardsused inCanadaand howtheyapplyto
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different reporting entities.
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1.2 Discusstheconceptualframeworkforfinancialreportingandthegeneralpurpose of m m m m m m m m m m m




financial reporting.
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1)In2011,CanadaadoptedInternationalFinancialReportingStandards(IFRS)forpublicly
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accountable enterprises. Explain the rationale for adopting IFRS in Canada.
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ANSWER:Astheglobaleconomyexpanded,theAccountingStandardsBoard(AcSB)choseto adopt
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IFRS in Canada to improve consistency and comparability in the international capital markets.
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Diff:1 Type: ES m m m

, 3 |P a g e
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TaxonomyCategory: Understanding m m




LearningOutcome:1.2Discusstheconceptualframeworkforfinancialreportingandthegeneral
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purpose of financial reporting.
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1.3 Define and identify strategic and non-strategic intercorporate investments made by m m m m m m m m m




reporting entities.
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1) Laliberte Products Ltd. (LPL), a public company, made several equity investments in the m m m m m m m m m m m m




current year. Which of the following investments would most likely be classified as an associate in
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LPL's financial statements?
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A) 25,000ofthe30,000outstandingvotingcommonsharesofGlabman Inc. Thereare m m m m m m m m m m m m




significant intercompany transactions between the two companies.
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B) 13,500ofthe45,000outstandingvotingcommonsharesofCCLLtd.Thereare m m m m m m m m m m m m




significant intercompany transactions between the two companies.
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C) 1,000 of the 20,000 outstanding voting common shares of Petruck Inc. There are no m m m m m m m m m m m m m




transactions between the two corporations and LPL plans to hold theseshares for less thana year.
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D) 3,000 of the 3,500 outstanding non-voting preferred shares of Paradise Ltd. There is a small m m m m m m m m m m m m m m




number of intercompany transactions between the two companies.
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ANSWER: B m




Diff:2 Type: MC m m m




TaxonomyCategory: Analyzing m m




LearningOutcome:1.3Defineandidentifystrategicandnon-strategicintercorporate
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investments made by reporting entities.
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2) What is thedefinition ofcontrolprovided in IFRS 10? m m m m m m m m m




ANSWER: IFRS 10 states that an investee has control only when all of the following three criteria are
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met: The power over the investee, exposure to the variable returns of the investee, and the ability to use
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that power to affect the earnings of the investee. First, the power to direct the relevant activities over
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the investee typically arises from a right such as voting rights, the right to choose key personnel or
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enforcement/veto rights. Power over the relevant activities wouldincludetheabilitytodirect the
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sellingorbuyingofgoodsandservices, direct research and development, budgeting, and the
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management of financial assets. Second, variable returns are defined as not fixed and with the
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potential to vary as a result of the performance of the investee. Finally,theremust bealinkbetweenthe
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powertocontroltherelevant activities andthereturnon the investment.
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