Question 1 1. During the month of May, Rupert Industries purchased office supplies on account for $8,500 plus GST of 5%. 2. Rupert Industries had sales on account of $15,000 during May and collected GST of 5%. 3. At the end of May, the company remitted (paid) the GST paid and collected to the Canada Revenue Agency. Required Prepare the journal entries to record the above transactions. Explanations are not required. (9 marks) DATE ACCOUNT DEBIT CREDIT Question 2 Tim's gross payroll for the work week ending Feb 28 was $750,000. The company deducted $39,375 for CPP, $11,850 for El, and $90,000 for income tax from the employees' pay. Tim's payroll costs for the week were $39,375 for CPP and $16,590 for El. I Required Prepare the journal entries to record the above transactions. Explanations are not required. (9 marks) DATE ACCOUNT DEBIT CREDIT Question 3 On January 1, 2021, Poet Corporation issued 5 year, 8% bond with a maturity value of $150,000. The bonds sell at 97.00 and pay interest on July 1 and January 1. Denver Corporation amortizes the bond using the effective interest rate method. The market rate is 9%. Required Prepare the journal entries to record the sale of the bond, the interest expense for July 1 and the interest accrual for December 31 (company has a year end of December 31). Explanations are not required. (9 marks) DATE ACCOUNT DEBIT CREDIT Question 4 Jan 3 The articles of incorporation for Post Malone Painting Inc. authorize the company to issue 1,000,000, $2.00 preferred shares and 2,000,000 common shares. During its first year of operations, Post Malone Painting Inc. completed the following transactions during 2021: Issued 100,000 common shares receiving cash of $1,000,000. Jan 28 Issued 250,000 preferred shares receiving cash of $500,000 Jan 30 Issued 25,000 common shares in exchange for equipment valued at $43,000 Dec 15 Malone declared a dividend of $10,000 to its shareholders. Dec. 28 Malone paid the cash dividend. Required: (a) Record the transactions in the general journal (10 marks) (b) Prepare the shareholders equity section of Post Malone's balance sheet at December 31, 2021 assuming the company earned $50,000 in net income. (7 marks) DATE ACCOUNT DEBIT CREDIT Question 5 Queen's Carpets Ltd. has the following shares outstanding since its initial share offering: 50,000 shares of $2.00 cumulative preferred shares 50,000 common shares issued at $15 each I The board of directors has declared the following dividends: 2016 none 2017 $50,000 2018 $75,000 2019 $150,000 2020 $300,000 Prepare a table indicating the split of the declared dividends between the common shareholders and the preferred shareholders for each year. (6 marks) Total Declared Total Common Total Preferred Year 2016 2017 2018 2019 2020
