Chapter 1
Recognition and Measurement
35
e) The retained earnings of the corporation on August 1, 2015 were $850,000. Net income
for fiscal 2016 was $650,000 and dividends totaling $200,000 were paid to common
shareholders. Prepare the statement of changes in equity for the year ended July 31, 2016
to report the change in retained earnings only.
f ) Greg has learned of a $300,000 grant the company can apply for through the Canadian
government to help with business development. There is a long application process,
which has not been started. This amount has been recorded as a grant receivable on the
statement of financial position of the corporation. Greg is unsure exactly how the grant
should be recorded.
