Clear Vent is a privately held Canadian informaon services business that oers access to pricing tools for commodies (such as metals, etc.) and provides other relevant content including webinars and podcasts. Clear Vents customers are global businesses who pay for services via an annual / 12-month subscripon fee that costs CAD $22,500 (for Canadian clients) and USD $30,000 for non-Canadian clients. As part of the annual fee Clear Vent customers can purchase ckets to an annual in-person conference held once per year for USD$1,000 (all customers must pay for the event ticket in USD). The event is also marketed and sold to non-clients at 10% more than the client rate and will be held in June this year. Addionally, members can pay for custom research iniaves for a separate cost. For members who sponsor a custom research project, Clear Vent manages the enre program, from inial scoping to nal deliverables. Approximately half of the members will require and pay for custom research at some point in a nancial year. Research projects are billed in advance. The Company was acquired by a private investor / new owner on December 31, 2022, who nanced the purchase with nancing from a bank. Clear Vent is now required to produce monthly nancial statements internally and for the bank as a condition of the loan. Note this loan is held by the owner and not in Clear Vents books. Requirements: You are the new accountant hired by Clear Vent on January 1st and have recently attended a meeting where the owner had several quesons and requests. The owner has asked you to prepare (i) journal entries (ii) Income Statement and (iii) Balance Sheet for the acvity related to the rst month (see acvity details further below). The owner also asked you several quesons which he would like you to respond to (see Appendix I for a list of the owners quesons). Note: The business is run out of Canada and cost are typically incurred in Canadian dollars. The Company uses one exchange rate for the month and the USD to CAD rate used for ALL USD transacons during January is 1.339. The Canadian dollar weakened however and by the end of the month the closing month end rate was 1.355. Acvity at Clear Vent during the rst month (Jan 2023): [in CAD unless otherwise noted] 1- On Jan 10th Clear Vent paid $150,000 (in advance) for rental of its annual oce space that runs from Jan 1st to Dec 31st, 2023. 2- Salaries are paid on the 15th and last day of each month; salaries per the payroll reports you obtained are: (assume all DAS have been remied and ignore employer poron fringe benets) Jan 15: $8,500 Jan 31: $8,500 New owners implemented a bonus program that is expected to be paid at the end of the year at an esmated rate of 10% of salaries expense. 3- New data services and web / technology systems to run the business cost $4,000 per month (these are charged to oce expenses) 4- Insurance for the oce and to run the business was pre-paid on a 2-year cycle starng July 1st, 2022, at a total cost of $24,000. 5- Customers invoiced in each month subscribe to a standard 12-month membership and are required to join as of the rst of the current month (they are given retroacve access to content and data). The monthly sales report (for January) can be found in Appendix II. Customers who purchased ckets to the in-person conference are also noted in the report. 6- As of Jan 31st, your policy requires 5% of outstanding receivables as an allowance for bad debt. The Company has never recorded an allowance for bad debt in the past. 7- During January Clear Vent received an addional USD $27,000 from non-client on-line conference registraons. The revenue is collected immediately at registraon and the credit card company charges a fee of 2% on all conference registraons up front. For simplicity Clear Vent expenses any fees in the month they are paid/incurred. 8- In January Clear Vent invoiced and collected $176,000 from US and Canadian customers for custom research projects, a non-taxable product. The project team provided you with a detailed status report in Appendix III. Revenue is recorded based on the % of compleon of work each month. 9- The Company spent $5,000 in markeng to aract new clients. It also paid $52,500 in advance for various items required to run the June conference such as hotel (rooms and meals deposits), airline reservaons and other services needed to operate an event. 10- On January 31st the Company repaid the USD $100,000 12 month note which carried a rate of 9% interest (assumed incurred evenly and paid each month end). 11- Half the accounts receivable and all the accounts payable from December have been collected / paid in January (all amounts originated in CAD)

Annondiv II - Fvtrart nf manthly caloc ronnrt llaniamel. price while USA based customers are not taxed. Ticket (event) sales are not taxable regardless of where clients are located. Appendix III-Research Report