Question 3 20 marks Ch 14 On February 1, 2020, Power Inc. issued $100.000 of 8% bonds that are due in 5 years. The bonds were issued to yield an annual market rate of 5% and pay interest semi-annually each Feb 1 and Aug 1 $4,600 of bond issue costs were incurred. Factoring in the bond issue costs, the annual effective interest rate would be 6%. Power Inc. follows IFRS and has a December 31 year end. Part A Required: Prepare the journal entries as requested. Show calculations below entry a) Feb 1, 2020 entry on issuance of bonds: Calculations: b) Aug 1, 2020 entry on payment of interest Calculations: c) On Aug 2. 2020, 50% of the bonds are repurchased at 106. Entry: Calculations: Part B Required: At December 31, 2020, what are the following balances on the statement of financial position relating to the bond? Amount Calculations Interest payable Bond payable Question# 5 20 marks Ch 15821 Scotia Corporation, a public company using IFRS, reported the following balances at January 1, 2020 Common Shares (3,000 shares issued) Retained Earnings Contributed Surplus common Accumulated Other Comprehensive Income 24,000 120,000 3,000 10,000 Scotia is subject to a 25% income tax rate Part A Prepare the journal enties for the following transactions that occurred during 2020 a) On July 1, repurchased 1.000 common shares for $7 por share and retired them Calculations: b) On December 1, when shares were trading at $5 a share, 20% stock dividend was declared to be issued in any 2021 Calculations: c) In December, Scotia found that 2019 revenue of $10,000 was never billed to a customer in error. The customer will now be billed and is collectible (2019 books are closed) Calculations: Part 8 Other information for Scotia for 2020 Netloss during the year (8.000 Other comprehensive loss (2.000) Required. Prepare the staterment of changes in shareholders' equity for the year ended Dec 31, 2020 for Scotia incorporating all of the information in this entire question. (Share information not required) Scotia Co. Statement of Changes in Shareholders' equity Year ended Dec 31, 2020 Question# 7 10 marks Ch 21 Part A: Required: Answer the questions where indicated. a) If a deposit received in 2019 from a customer for work to be performed in 2020 was recorded as revenue in 2019. is 2020 net income over or understated? b) If wages payable was not accrued at December 31, 2019, is 2019 net income over or understated? c) If costs to purchase inventory are increasing throughout the year, what method provides the higher ending inventory value? FIFO or weighted average ? Part B Wu Co follows IFRS Required: For each of the situations below, indicate the nature of the accounting change or correction by placing an "X" in the best selection Choose the best ONE only for each. State any assumptions needed, Change in Change in Change due to accounting Assumption accounting correction of ar ESTIMATE POLICY ERROR (prospective (if needed) treatment a) A change from the straight-line method to the effective interest method of amortization of a bond discount or premium b) Change in the amortization period for an intangible asset. c) Change in calculation of warranty liabilities based on new information d) Change due to adoption of a new accounting standard Question #2 14 marks Ch 13 XYZ Co. has a program for customers where it provides a free gift" after they purchase a product for $280. The gift costs $20 per customer but the value to the customer is $30 for the service. The gift can be redeemed up to one year from purchase. In 2020, XYZ purchased 600 "gifts", sold 1000 products under this program, and provided 400 gifts to customers. It is expected that only 60% of customers will redeem the gift. A) Prepare the journal entries for all of 2020 (including the sales) to account for the above assuming the revenue approach is used for the gift". B) Prepare the journal entries for all of 2020 (including the sales) to account for the above assuming the expense approach is used for the "gift