THE COMPANY:

Aylmer Industries Inc. $($Aylmer$)$ has been in business since $2021.$ Aylmer has two main business segments. This first segment is the construction of large$-$scale projects. In $2023,$ Aylmer had two large construction projects in process. The other segment is the purchase and sale of small machines needed for the construction industry.

There are $250,000$ common shares outstanding of this publicly traded company. Since Aylmer is a publicly traded company, it follows IFRS.

There are no preferred shares outstanding.

The trial balance at December $31,2023$ and December $31,2022$ are provided for comparison purposes on the tab $$Trial Balance$$ in the excel file. Use this excel worksheet to post journal entries required, to ensure that you remain in balance. The worksheet should also be used to provide a basis of preparing the financial statements at December $31,2023.$

Ignore income taxes for this project.

Aylmer posted transactions throughout the year and the trial balance in excel was prepared. Aylmer$$s fiscal year$-$end is December $31$st$.$ As a year$-$end review, management of Aylmer discovered that the following items have NOT been recorded and are NOT reflected in the trial balance provided at December $31,2023$:

Analyze and review the following items $($a $$ n$)$ and determine the appropriate journal entry. Record the journal entry in the excel file labelled $$journal entries$.$ Use the various tabs in the excel file to record calculations and support for your journal entries.

TRANSACTIONS NOT INCLUDED IN THE TRIAL BALANCE:

a$.$ Calculate bad debt

On December $31,$ after many attempts at collecting the outstanding balance of Copper Gallery, the controller decided to write off that balance.

Aylmer calculates bad debt on trade receivables only, not on project receivables. Bad debt is estimated to be:

$0-30$ days $1\%$

$3160$ days $5\%$

$6190$ days $7\mathrm{.}5\%$

$91120$ days $10\%$

Over $120$ days $15\%$

In the excel spreadsheet, see the tab labelled $$Trade Accounts Receivable Detail$$ to perform any necessary calculations. Be sure to write off the balance of Copper Gallery referenced above before doing these calculations.

b$.$ FV$-$NI Investments

At December $31,2023$; the fair value of the short$-$term investments were:

Redemption Corp $$12\mathrm{.}63$ per share

ALM Corp $$23\mathrm{.}98$ per share

In the excel spreadsheet, see the tab $$FV$-$NI Investments$$ to perform any necessary calculations.

c$.$ Prepaid Insurance

The prepaid amount on the trial balance consists of a payment made to State Farm Insurance on October $1,2023.$ The policy lasts $18$ months.

d$.$ Inventory $$ LCM

The company has the policy of stating all inventory on hand at the lower of cost and net realizable value. The company uses the direct method for any adjustments to inventory.

NOTE $$ on the income statement use $$Cost of Goods Sold$$ from the trial balance $-$ do not calculate the cost of goods sold.

In the excel spreadsheet, see the tab $$Inventory Detail$$ to perform any necessary calculations.

e$.$ Record Depreciation on assets

Depreciate the fixed assets according to the schedule. Depreciation is calculated on an annual basis.

In the excel spreadsheet, see the tab $$Fixed Asset Details$$ to perform any necessary calculations

f$.$ Trade a vehicle

On December $31,2023($after depreciation was recorded$)$; the company traded the Toro lawn mower which was acquired on February $1,2021($asset #$2021-02)$ for a $2014$ Ford F$150.$ In addition to the trade, the company paid $$6,000$ cash for the new truck. The fair value of the Toro lawn mower on this date was $$18,000.$ Assume that this transaction HAS commercial substance. Once this new asset is purchased, do not depreciate it since it was purchased on the last day of the year.

In the excel spreadsheet, see the tab $$Fixed Asset Details$$ to perform any necessary calculations; and update the schedule as needed.

g$.$ Investments $$FV$-$OCI

On December $31,2023,$ the fair value per share of Hub Cap Company was $$11\mathrm{.}25$ per share. Aylmer decided to sell its shares in Hub Cap Company at that time $($sale was not recorded on the trial balance$).$ Hint: after you record the sale, be sure to close the gain or loss on sale to retained earnings similar to how the sale was accounted for in TR$11-7$ in class.

In the excel spreadsheet, see the tab $$FV$-$OCI Investments$$ to perform any necessary calculations.

h$.$ Bank Loan

The loan for $$8,000,000$ was borrowed at January $1,2023.$ Interest on the bank loan is $2\mathrm{.}75\%$ annually. Interest has to be paid every January $2,$ so the first interest payment is due January $2,2024.$ No principal payments were made during the year. Of the bank loan, $$2,000,000$ is due June $30,2024$ with the remainder due June $30,2029.$

i$.$ Notes Payable

This is a short$-$term note. The company borrowed money from JRT Investments on October $31,2023$ for $3$ months. The principle, along with interest is to be repaid on January $31,2024.$ The interest rate is $1\mathrm{.}5\%.$

j$.$ Long$-$term contracts

The company uses the percentage of completion method for rerecording long$-$term contracts. The company hasc