Problem 1 (8 marks) You have the following selected account balances from the books of LMT Inc. as of December 31, 2020: Cash $80,000 Sales returns $89,000 FVTOCI investments 223,000 Bank overdraft 9,000 Accounts receivable 780,000 AFDA 10,000 (credit balance) Inventory 440,000 Other 40,000cr. Comprehensive Income Sales 2,120,000 Retained earnings 970,000 The company asked you to enter the necessary journal entries and end-of-year adjusting entries which are required for the following accounts: 1) Accounts receivable and AFDA: The current balances of the Accounts receivable and the AFDA accounts ($780,000 and $10,000, respectively) do not include a write-off of an account receivable of $20,000. Prepare the required journal entry. 2) Accounts receivable and AFDA: after recalculating the balances of these two accounts based on (1), you determine that the AFDA ending balance in December 2020 should be 2% of the ending Accounts receivable balance. Prepare the required adjusting entry. 3) FVTOCI investments: These investments were acquired during 2020, and are currently presented at their original cost of $223,000. You determine that the market value on December 31, 2020 is $225,000. Prepare the required adjusting entry. 4) Cash: The current cash balance of $80,000 includes restricted cash of $10,000. The restriction period is from January 1, 2020 to December 31, 2022. Prepare the required journal entry. 5) Bank Overdraft: The bank overdraft of $9,000 is currently presented as a current liability. You determine that the bank overdraft is in National Bank, where LMT Inc. has a chequing account with a positive balance. National Bank has the legal right to offset the accounts against each other. Prepare the required journal entry. 6) Sales: the current amount in the "Sales" account includes a cash advance of $40,000 received from a customer on November 2020. On December 31, 2020, only $10,000 of this amount was earned by LMT Inc.. Prepare the required adjusting entry.