Question 1: Determining Cash Balance

1. Cash 300,000
Bank overdraft -37000
Petty Cash 1350
Reported as Cash amount 264,350

2) Chequeing account bal. 540,000

Bank draft 9800
Reported as Cash Total 549,800

3) Cheq bal. 700,000

Cash advance. 900
Total 700,900

Question 2: Bank Reconcilliation

a) Deposits in transit april. 30 1540

+ Deposit by book (may) 5810
- deposit by bank -5000
Bal. of deposit in transit (may 31) 2350

Outstanding cheque april. 30 2000

+ cheques by book during may 3100
- Cheques by bank during may -4000
Outstanding chque. May 31 1100

b) Recon. per bank, unadjust.bal. 8760

 + Deposit in transit 2350
- Outstanding of cheque -1100
Reconciled bank balance 10010 * Bal must equal

Recond. Per book, unadjust. Bal. 9370

+ Note collected 1000
- Bank service charge -25
- NSF cheque -335
Reconciled book balance 10010 *

c) Dr. Cash 1000

Cr. Notes Receivable 1000
Dr. Bank service charge 25
Cr. Cash 25
Dr. AR 335 If bank charges more for processing NSF then add it to
Cr. Cash 335 and AR which the extra charge is paid by customer.

Question 3: Percentage of Sales Approach

a) Balance Jan. 1, 2023 400,000

+ 80 mil. x 90% 0.8%` 576,000
- Write off -500,000
Unadj. bal. 476,000
+ adjustment 49,000
Required bal. dec 31, 2023 525,000

b) Dec. 31, 2023

Dr. Loss on impairment 49,000
Cr. Allow for exp. Credit loss 49,000

Question 4: Non-Interest-bearing Notes

 0.97087 = 47573/49000 PVF table
1.03 = 49,000 / 47573
Day 1:
Dr. Notes Receivable 47,573 Intially Aero should only account 47K
Cr. Cash 47,573 as it is the amount actually lent to lender
At maturity:
Dr. Cash 49,000
Cr. Notes receivable 47,573
Cr. Interest revenue/income 1,427

Question 5: Note issued at discount

Org.
Year 1
Year 2
Year 3
Mat

Corp fi me up, [Insert Timeline]

n = 3 years
r = 9%
PV Table me up -> 0.77218 Bring 5K notes back to day 1
0.77218 x 5,000 = 3861
Gain on disposal: 3861 - 2500 = 1361

a) a. Dr. Notes receivable 3,861

Dr. Accumulated depreciation 12,500
Cr. Equip 15,000
Cr. Gain on disposal 1,361

a) b. Year 1:
Dr. notes receivable (3861*9%) 347 Use NR, since cash was not given yet.
Cr. Interest rev/income 347 Don't use interst recievable as it is a
non-interest bearing note.
 Year 2:
Dr. notes receivable (3861+347*9%) 379 For new interest use total NR
Cr. Interest rev/income 379

Year 3:
Dr. notes receivable (4587*9%) 413 Values are rounded
Cr. Interest rev/income 413

3961+347+379+413 = 5,000

a) c. Dr. Cash 5,000

Cr. Notes Receivable 5,000

b) a. SAME

b) b. ASPE (allocate evenly)

5,000 - 3861 = 1139/3

Year 1:
Dr. notes receivable 380
Cr. Interest rev/income 380

Year 2:
Dr. notes receivable 380
Cr. Interest rev/income 380

Year 3:
Dr. notes receivable 379
Cr. Interest rev/income 379

3861+380+380+379 = 5,000

b) c. SAME

Question 6: Secured Borrowing

Alpha Inc.
Dr. Cash 2,480,000 The finance expense happens right away
 Dr. Finance expense(3mil x 4%) 120,000 and is deducted from the amount they will receive
Cr. Notes Payable 2,600,000 don't get the full 2.6 mill
Alberta Provincial bank.
Dr. Notes receivable 2,600,000 Nothing to do with interest since it happens
Cr. Cash 2,480,000 on day 1
Cr. Finance Revenue 120,000

Question 7: Sales of Receivables

a) Without recourse (IFRS)

Landstalker.
Dr. Cash (91% x 750,000) 682,500
Dr. Due from Factor (5%) 37,500 Retaining of 5%- new asset acc.
Dr. Loss on disposal of receivable 4% 30,000 Finance charge
Cr. AR 750,000
Leandor.
Dr. AR 750,000
Cr. Cash 682,500
Cr. Finance Revenue 30,000
Cr. Due to Landstalker 37,500 New liability acc.

b) With Recourse (ASPE) 9K is basically the uncollectible amount

Landstalker.
Dr. Cash 682,500
Dr. Due from Factor 5% 37,500
Dr. Loss on disposal of receivable 39,000 9K goes here
Cr. AR 750,000
Cr. Recourse liabilities 9,000 9K to incorp the recourse

Dr. Recourse liability 9,000 If client pays all 750k on AR, then we
Cr. Loss on disposal 9,000 just reverse all loss. NOT INCLUDED
or Cr. Cash
e for processing NSF then add it to cash
tra charge is paid by customer.
only account 47K
ctually lent to lender

Assignment
48,000 10% r
4,800
5280
5808
63,888 Matches

was not given yet.

ievable as it is a
happens right away
m the amount they will receive

nterest since it happens

Assignment
1,900,000 1,577,000
171,000 Recourse
8% Charge
9% Withhold
323000
171000

collectible amount

k on AR, then we
NOT INCLUDED