Share Retirement: At the beginning of 20X1, the accounting records of Farhad Corporation

1 Share Retirement: At the beginning of 20X1, the accounting records of Farhad Corporation reported the following:Preferred shares, 3,000 shares outstanding, no-par $75,000Common shares, 90,000 shares outstanding, no par 184,500Contribute capital on common share retirement 55,000Retained earnings 275,000During the year, the company acquired and retired shares, while other shares were issued:15 march 12,000 common shares bought and retired at $6 per share16 march 1,500 preferred shares bought and retired at $27 per share20 may 4,000 common shares bought and retired at $1 per share25 may 300 preferred shares bought and retired at $24 per share30 may 5,000 common shares issued at $12.32 per share15 nov 2,000 common shares bought and retired at $14 per shareRequired:Give journal entries to record each share retirement transaction.Calculate the closing balance in each account in shareholders’ equity2 Tax Calculations (Canada): Martin Limited, in the first year of its operations, reported the following information regarding its operations:Income before tax for the year was $2,500,000 and the tax rate was 38%Depreciation was $240,000, and CCA was $134,000. Net book value at year end was $1,680,000, while UCC was $1,786,000.The warranty program generated an estimated cost (expense) on the statement of profit and loss of $514,000 but the cash paid out was $348,000. The $166,000 liability resulting from this was shown as a current liability. On the income tax return, the cash paid is the amount deductible.Golf club dues of $30,000 were included in the statement of profit and loss but were not allowed to be deducted for tax purposes.In the second year of its operations, Martin Limited reported the following information:Income before income tax for the year was $2,750,000, and the tax rate was 40%.Depreciation was $240,000, and the CCA was $740,000. Net book value at year end was $1,440,000, while UCC was $1,046,000.The estimated costs of the warranty program were $574,000, and the crash paid out was $484,000. The liability had a balance of $256,000.Required:Prepare the journal entry to record income tax expense in the first and second years of operations. The second-year tax rate was not enacted until the second year.