North Star Inc, a manufacturer of computer software, began operations on January 2, 2021. Below are the transactions relating to the acquisitions and disposals of capital assets for the year ended December 31, 2021, and the first 6 months of 2022. North Star Inc. uses the Net Method for recording transactions and reports under IFRS.

Jan 2, paid $5,000 in legal fees to form the corporation

Jan 3, purchased Land, Building, Land Improvements and Equipment for total cash price of $1,575,000. The estimated market values of each asset were Land, $578,000; Building, $816,000; Land Improvements, $85,000 and Equipment, $221,000.

Jan 3, Paid the following additional costs with respect to the above purchase:

Landscaping costs $25,000

Land transfer tax. 35000

Equipment installation 3,000

The building has an estimated life of 15 years, a residual value of $51,300 and will be depreciated on a straight-line basis. The Land Improvements have an estimated service life of 8 years, no residual value and will be depreciated on the declining-balance basis at double the straight-line rate. The equipment is expected to produce 256,000 units of product over its lifetime and to have a residual value of $2,500. The equipment will be depreciated using the units-of-production method.

Feb 1 purchased a Dell computer, in exchange for signing a non-interest bearing note payable in the amount of $10,000. The note is repayable in five equal annual instalments of $2,000 each, with the first payment to be made on February 1, 2022. The market rate of interest on debts of a similar type was 8%. The computer is expected to have an economic life of five years and a residual value of $200 and will be depreciated on the declining balance basis at double the straight-line rate.

March 1, Completed the production of new computer software. The total costs of purchasing the patent for the software was $15,000. The company estimates that the patent will have an economic useful life of 5 years.

April 15, one of the shareholders donated a new ASUS computer to the company. The ASUS computer has an estimated fair market value of $7,500. This computer has an estimated residual value of $100 and is expected to be used 10,000 hours over its economic life. The ASUS computer will be depreciated using the service-hours method

Oct 1, North Star Inc. received a government grant to purchase a Mac computer that would assist the company in the developing software for a local non-profit. The cost of the Mac computer (purchased on the same day) is $8,000, with an estimated residual value of $400, an estimated service life of 8 years and will be depreciated using straight-line method. North Star Inc. records grants using the deferral method.

Nov 1, Purchased on credit (terms 3/10, n/60) a used delivery van at a list price of $25,000. There was an additional charge of $650 for the installation of racks and shelves in the delivery van, which were required to make it operationally suitable. The delivery van has an estimated useful life of 10 years, at which time it can be sold for approximately $4,500. The delivery van will be depreciated on the declining balance basis at double the straight-line rate. (Hint remember to use the NET METHOD)

Dec 15, paid for the delivery van purchased on November 1.

Dec 31 Performed all necessary year-end adjusting entries

Additional information provided at the year-end:

a) The equipment purchased on January 3 produced 34,000 units as of December 31, 2021.

b) The ASUS computer purchased on April 15 had been used 2,500 hours as of December 31, 2021.

c) North Star Inc. has chosen to use the Revaluation Model (elimination method) for its property, plant and equipment. When the financial statements for the year ended December 31, 2021, were being prepared, it was discovered that the value of the land and building had significantly increased in value since the date of purchase and North Star Inc. wishes to record the effects of this increase in the 2021 financial statements. The total value of the land and building had increased to $1.8 million ($1,800,000) with 40% of the value assigned to land and 60% of the value assigned to building. (Hint - This will require additional year-end adjusting entries!)

2022

Feb 1 Paid the first instalment on the note payable issued on February 1, 2021.

Mar 31 Exchanged the ASUS computer for a photocopier. The fair market value the ASUS computer was $6,500 and the fair market value of the photocopier was $6,000. At the time of the exchange, the computer had been used for 300 hours.

Apr 28 North Star Inc. had to defend its patent in court (from March 1, 2021). They were not successful. Litigation fees amounted to $1,500.

June 1 Paid $257,000 cash to purchase all of the non-cash assets and to assume all of the liabilities of Compuware Software Inc. The book values and fair market values on June 1 were as follows:

	Book value	Market Value
Accounts Receivable	58000	58000
Inventory	160000	90000
Building	309000	285000
Land	11000	21000
Accounts payable	37000	27000
Mortgage payable	200000	200000

Required:

Prepare journal entries to record all of the above transactions from January 1, 2021, to June 1, 2022. For any time-based depreciation calculations, the companys policy is to record depreciation based on the number of months ownership in the year of acquisition.

can some solve this please!!!!