Shortly after earning a CPA designation, you accepted a position as an accounting manager for Tatem Academy Ltd. (TAL), a private high school known for producing graduates who earn full scholarships for top universities as ranked by Macleans magazine.

You have gathered the following details regarding cash as at TALs December 31, 2018 year end (all amounts in Canadian dollars (CAD) unless otherwise stated):

• The balance of TALs Royal Bank of Canada (RBC) chequing account was $2,124,200. TAL also has a savings account with Toronto-Dominion Bank with a balance of $5,856,100.

• TAL has a line of credit with RBC. The borrowing limit is $2,000,000 and the December 31

  balance outstanding was $400,000.

• The Board of Directors required that TAL set aside $5,000,000 to partially fund the

  construction of a new athletics complex. The funds were invested in Government of Canada

  treasury bills with an original term to maturity of 89 days.

• TAL regularly purchases supplies for its science labs from suppliers located in the United

  States. As such, it maintains a US dollar (USD) denominated bank account. As at December 31, the account had a balance of $275,500 USD. The average exchange rate for the year ended December 31, 2018 was $1 USD = $1.2957 CAD with an exchange rate of $1 USD = $1.3642 CAD on December 31, 2018.

  Nigel Tatem, TALs headmaster, has asked you to determine the TOTAL amount of cash to be reported on TALs ASPE compliant balance sheet as at December 31, 2018. He has instructed you to clearly label all amounts, provide detailed supporting calculations and round all amounts to the nearest dollar. For any amounts NOT included in cash, you are to indicate that they should be excluded AND BRIEFLY DESCRIBE how they should be reported (5 marks).

Next, you prepared the bank reconciliation for TALs RBC chequing account as at December 31, 2018. You have decided to write a BRIEF note indicating for which reconciling items it willAND will NOT be necessary to journalize the adjustments AND providing your reasoning (4 marks)

For grade nine, parents are required to pay tuition of $40,000 in advance of the school year. After one year of enrollment at TAL, parents pay tuition of $4,000 on the first day of each month from September to June with no tuition due in July or August. Although it is unusual for tuition to go unpaid, it does happen. On December 31, 2018, Nigel approved the writeoff of the $32,000 accounts receivable owing from Donalda Tennison for tuition for her twins when she was let go from her job as a corporate executive after being convicted of fraud. Nigel has asked that you prepare the required journal entry (in good form) (1 mark).

Nigel has requested that you prepare the journal entry required (in good form) to adjust accounts receivable to their net realizable value as at December 31, 2018. According to the general ledger, the balance in the allowance for doubtful accounts was a credit of $12,500 prior to the writeoff of the amount owing from Donalda Tennison. Nigel has instructed you to provide detailed supporting calculations and round all amounts to the nearest dollar (6 marks).

Nigel has asked RBC to increase the borrowing limit on the line of credit to $3,000,000. The loans officer commented that it would be necessary for TAL to provide its accounts receivable as security for the line of credit. Nigel is unsure how this would impact the accounting for TALsaccounts receivable so he has asked that you provide a BRIEF EXPLANATION (2 marks).