Question #1 (22 marks) The following information was available to reconcile AMB Companys book balance of the chequing account with the Bank of Montreal, with the bank statement balance as of February 28 of the current year:

a) After all posting had been completed on February 28 the companys general ledger cash account had a $7,180 debit balance. The bank statement indicated a balance of $9,415 as of the same date.

b) Cheques #217, in the amount of $353 and #222 in the amount of $709, were outstanding on the January 31 bank reconciliation. Cheque #222 was cashed in February but cheque #217 was not.

c) In comparing the February cashed cheques to the entries in the accounting records, it was found that cheque #297 in payment of office supplies purchased was correctly cashed for $724, but was recorded in the books as $742.

d) Cheques #331 in the amount of $482 and #333 in the amount of $240, both recorded in the cash disbursements journal in February, were not among the February cashed cheques.

e) A credit memorandum, enclosed with the bank statement indicated that the bank had collected a $3,600 noninterest-bearing note on behalf of the company and had deducted a $24 collection fee from the proceeds. The difference was credited to the companys account.

f) A debit memorandum for $464, enclosed with the bank statement, listed a $452 NSF cheque plus a $12 NSF service charge. The cheque had been received from a customer, David Mundle. g) Among the cashed cheques was an $18 debit memorandum for bank service charges for the month of February

. h) The February 28 cash receipts in the amount of $1,952, had been placed in the banks night depository after banking hours on that date and therefore did not appear on the February bank statement.

i) AMB Company also has the following general ledger accounts pertaining to Cash: Petty Cash $200 DR Balance (CDN) Bank of Nova Scotia chequing account 2,000 CR Balance (CDN) Toronto Dominion Bank chequing account $1,500 DR Balance (USD) Required: 1. Prepare the bank reconciliation for the Bank of Montreal chequing account as at February 28. (11 marks)

. Prepare ALL of the necessary adjusting entries. You must have the correct account AND amount to receive marks. (7 marks) 3. Prepare the sections of the balance sheet for AMB Company as at February 28, applicable to the cash accounts. Assume that the rate of exchange was $1.00 U.S = $1.20 Canadian. Include notes to the financial statements to explain your classifications. (4 marks)

Question #2 (14 marks) A summary of the December 31st Accounts Receivable aged listing for Simmers Ltd. indicated the following information: Total Accounts Receivable Category % Uncollectible $55,000 Current 1% $23,000 1 30 days past due 3% $24,000 31 60 days past due 7% $12,000 Over 60 days 15% As at December 31st, the Allowance for Doubtful Accounts has a DEBIT balance of $200 before adjustments have been made. The balance shown in the over 60 days category includes an amount of $3,000, which is known to be uncollectible because the customer has filed for bankruptcy. Included in the Current category is an income tax refund receivable in the amount of $2,300, expected to be recovered in 90 days. Also included in the Current category is a $4,200 account, which represents an IOU from the companys president for money loaned to him.

Required: 1. Prepare any necessary year end adjusting and reclassification entries with respect to the above information, on the assumption that the company uses the aged listing of accounts receivable to calculate the uncollectible accounts. By reclassification entries, I mean that if something does not belong in Accounts Receivable, then prepare a journal entry to reallocate it! Show all of your calculations. (10 marks) 2. Prepare the balance sheet presentation of ALL receivables as at December 31. (4 marks)

Question #3 (15 marks) Choose your own adventure! Select Question 3A or 3B to submit for marking. Please clearly indicate your selection. Do not do both, or I will mark the first one completed. Question 3A On October 31, 2020, Hall Company sold land (with an original cost of $250,000) to Door Company and accepted in exchange a promissory note with a face value of $300,000, a due date of October 31, 2023, and a stated rate of 5 percent, with interest receivable each October 31 starting in 2021, until maturity. The fair value of the land is not readily determinable, and the note is not readily marketable. Under the circumstances, the note is considered to have an appropriate market rate of interest of 10 percent. The year-end of Hall Company is December 31.

Required: a) Calculate the present value of the note. (2 marks)

b) Prepare a Schedule of Amortization for Hall Company using the effective interest method. (1 mark)

While this part is not worth any substantial marks, you will need to do this to complete part (c). Display your table in whole dollars only by using the decreasing the decimal function in excel. Decrease the decimal function: c) Prepare all of the necessary journal entries from October 31, 2020 up to and including October 31, 2021. (12 marks)

Hint: when recording the issue of the note, you will need to calculate either a gain or loss on the disposition of the land

Question 3B On July 1 2020, AC Inc. rendered services to a customer in exchange for an eight-year promissory note having a face value of $400,000. Interest on this note was payable annually starting in 2021 to Bonus Inc. at a rate of 3%. AC Inc.s customer in this transaction has a credit rating that requires them to borrow money at 12%.

Required: a) Calculate the present value of the note. (2 marks)

b) Prepare a Schedule of Amortization for AC Inc. using the effective interest method. (1 mark)

While this part is not worth any substantial marks, you will need to do this to complete part (c). Display your table in whole dollars only by using the decreasing the decimal function in excel. Decrease the decimal function: c) Is this note issued at a discount or a premium? Explain. (1 mark) d) Prepare all of the necessary journal entries from July 1, 2020 up to and including July 1, 2021. (11 marks)