Question 1: () Smith Falls Cable Companys (SFCC) balance sheet includes the following assets under Property, Plant, and Equipment: Land, Buildings, Office Furniture, Communication Equipment, and Televideo Equipment. The company has a separate accumulated depreciation account for each of these assets except Land. Assume that SFCC completed the following transactions in 2021:

Jan 4 Sold communication equipment with accumulated depreciation of $85,000 (cost of $96,000) for $18,000 cash. Purchased new communication equipment for $118,000 in cash.

June 30 Sold a building that had cost $495,000 and had accumulated depreciation of $255,000 through December 31 of the preceding year. Depreciation is computed on a straight-line basis. The building had a 40-year useful life and a residual value of $95,000. The company received $50,000 cash and a $250,000 Note receivable.

Dec 31 Recorded depreciation on the new communication equipment, using the double-declining balance method over a 5-year useful life with zero residual value.

Required: Record the transactions in SFCCs journal.

Question 2: (16 Marks) PART A: (8 marks) Silver Records has 4 employees who are paid on the 1^st and 15^th of each month for the work they performed in the preceding half-month. At November 30, each employee is owed gross pay of $2,250, but each one must have 10% of their pay withheld for income taxes. Each must also make CPP contributions of 5.1% of their gross pay and pay EI premiums of 1.62% of their gross pay.

Required:

1. Prepare a single journal entry required to record the accrual of payroll on November 30
2. Prepare the journal entry to record the related employers liability on November 30

PART B: (8 marks) Superb Industries borrowed money by issuing a $30,000, 6%, 10-year bond. The Assume that Superb Industries issued the bond on April 1, 2021 at a price of $27,868. The market interest rate on April 1 was 7%. Superbs accounting year ends on September 30.

Required: Journalize the following transactions for Superb Industries:

1. Issuance of the bonds on April 1, 2021
2. Accrual of interest expense and amortization of bonds on September 30, 2021 (use effective interest amortization method, and round amounts to the nearest dollar)
3. Payment of the first semi-annual interest amount on October 1, 2021

Question 3: Cookies & Cakes Inc. is authorized to issue an unlimited number of common shares and 10,000 preferred shares. During its first year, the business completed the following share issuance transactions:

July 19 Issued 16,000 common shares for cash of $8.75 per share

Oct 3 Issued 800, $2.25 preferred shares for $80,000 cash

Oct 11 Received inventory valued at $13,000 and equipment with fair value of $9,500 for 3,400 common shares

Required:

1. Journalize the transactions
2. Prepare the shareholders equity section of Cookies & Cakes balance sheet. The ending balance of Retained Earnings is a deficit of $45,000

Question 4: (20 marks) The partial comparative balance sheets of High Movie Company at March 31, 2021, reported the following:

	March 31
	2021	2020
Current assets:
Cash and cash equivalents	$7,000	$16,000
Accounts receivable	14,800	22,200
Inventories	63,900	60,700
Prepaid expenses	3,400	1,600
Current liabilities:
Accounts payable	57,700	55,300
Accrued liabilities	14.600	16,700
Income tax payable	14,400	10,800

Highs transactions and results for the year ended March 31, 2021 also included the following:

Acquisition of land by issuing note payable $101,000 Payment of cash dividend 31,000 Cash purchase of equipment 78,600 Issuance of long-term note payable to borrow cash 45,000 Sale of long-term investment for cash 13,300 Depreciation expense 15,000 Cash purchase of building 44,000 Net income 57,000 Issuance of common shares for cash 8,000 Share dividend 18,000 Required: Prepare High Movie Companys statement of cash flows for the year ended March 31, 2021, using the indirect method to report cash flows from operating activities.