Question $1(20$p$)$

Shown below is the information needed to prepare a bank reconciliation for ABC Company at December $31$:

At December $31,$ cash per the bank statement was $$17,000$; cash per the company's records was $$21,000.$

Two debit memoranda accompanied the bank statement: service charges for December of $$50,$ and a $$950$ check drawn by Jane Jones marked $"$NSF$."$

Cash receipts of $$9,000$ on December $31$ were not deposited until January $4.$

The following checks had been issued in December but were not included among the paid checks returned by the bank: no$.220$ for $$2,000,$ no$.230$ for $$1,000,$ and no$.240$ for $$3,000.$ Required:

a$.$ Prepare a bank reconciliation at December $31.$

b$.$ Prepare the necessary journal entry or entries to update the accounting records.

Question $2(20$p$)$

Civciv Bus Service traded in a used bus for a new one. The book value of the old bus is $$20,000.$ Accumulated depreciation at the time of the trade$-$in amounted to $$40,000.$ The new bus cost $$80,000,$ but Mathews was given a trade$-$in allowance of $$30,000.$

a$.$ Find the original cost of the old bus?

b$.$ What amount of cash did Civciv have to pay to acquire the new bus?

c$.$ Compute the gain or loss on the disposal for financial reporting purposes.

Question $3(45$p$)$

Gazima$$usa$,$ Inc., purchased a new machine on September $1$ of the current year at a cost of $$115,000.$ The machine's estimated useful life at the time of the purchase was five years, and its residual value was $$10,000.$

Instructions

a$.$ Prepare a complete depreciation schedule, beginning with the beginning year, under the

a$)$ Straight$-$line $($assume that the Fractional method is used$)$

b$)200$ percent declining$-$balance $($assume that the half$-$year convention is used$)$

c$)$ Assume that Swanson & Hiller sells the machine on December $31$ of the fourth year for $$30,000$ cash. Compute the resulting gain or loss from this sale under each of the depreciation methods used in part a and $b.$