Comprehensive Case: Chapters 3-9 Clear Images Lid. has been in operation for several years. It purchases, customizes, and sells studio sets for its clients. The Record and post company's post-closing trial balance at July 31, 2015, the end of its fiscal year, is presented below: transaction and adji ing journal entries: CLEAR IMAGES LTD. prepare adjusted tri balance and financi Post-Closing Trial Balance statements. July 31, 2015 (SO 2. 3.-4,5) Debit Credit Cash $ 170,000 Accounts receivable 2,700,000 Allowance for doubtful accounts $ 300,000 Merchandise inventory 500,000 194,000 Accumulated depreciation-equipment 73,669 ... Accounts payable 1,009,000 payable 350,000 Common shares 300,000 Retained earnings 1,531,331 $3,564,000 $3,564,000 Equipment Bank loan The company had a limited amount of business activity in August 2015 because of holidays for both the company and its major customers. You have been hired on a temporary basis to update the company's records for August. The August transactions and adjustments are presented below: Aug. 1 Paid $20,000 for office expenses and $3,600 for the August rent 2 Accepted a six-month, 8% note in exchange for Chen Enterprises overdue account receivable of $100,000. 3 Sale on account to Chavier Ltd. for $500,000, terms 2/10. n/30. Cost of goods sold, $270,000. The company uses a perpetual Inventory system. & Determined that an account receivable from Densmore Ltd. of $70,000 is uncollectible. 9 A $300,000 partial payment on account was received from Chavier (see August 3 transaction). 10 Old equipment was sold for $6,000. The equipment's original cost was $44.000; accumulated depre. ciation to the date of disposal was $36,169. 14 Paid a $10,000 income tax instalment. patent for $24,000 cash. The estimated useful life of the patent is five years, the legal life life, 20 years. 31 Recorded bank credit card sales from sales of digital library images for the month, $75,000. The 21 Purchased at cost of goods sold is $35,000. 31 The monthly bank statement revealed the following unrecorded items interest on bank loan, $1,500, and bank service charges , $1,130 which included credit card and other bank fees. 31 Reviewed outstanding accounts receivable. Determined, through an aging of accounts, that doubt- full accounts totalled $320,000 at month end. 31 Recorded depreciation for the month on the remaining equipment that cost $150,000 and is still in use. Useful life of all equipment is estimated to be four years with no residual value. The straight- line method of depreciation is used and depreciation is calculated to the nearest month. 31 Recorded and paid salaries for the month of $100,000. 31 Accrued interest on the Chen Enterprises' note receivable (see August 2 transaction). 31 Recorded amortization on the patent (see August 21 transaction). A full month's amortization is recorded on any intangible assets acquired during the month. Instructions (a) Prepare T accounts and enter the July 31 balances. (b) Record the August transactions and adjustments. (c) Post the journal entries from part (b) to the T accounts. (d) Prepare an adjusted trial balance at August 31. (c) Prepare an (1) income statement, (2) statement of changes in equity, and (3) statement of financial position at August 31. Comprehensive Case: Chapters 3-9 transaction Clear Images Ltd. has been in operation for several years. It purchases, customises, and sells studio sets for its dients. The Record and company's post-closing trial balance at July 31, 2015, the end of its fiscal year, is presented below ing journal prepare adid CLEAR IMAGES LTD. balance and Post-Closing Thal Balance statements July 31, 2015 (SO2, 3., Deber Credit Cash & $ 170,000 Accounts receivable 2.700.000 Allowance for doubtful accounts $ 300,000 Merchandise inventory 500,000 Equipment 190.000 Accumulated depreciation-equipment 73.469 Accounts payable 1.009.000 Bank loan payable 350,000 Common shares 300,000 Retained earning 1,531,331 $3.564.000 53.564,000 The company had a limited amount of business activity in August 2015 because of holidays for both the company and its major customers. You have been hired on a temporary hasis to update the company records for August. The August transactions and adjustments are presented below: Aug 1 Paid $20,000 for office expenses and $3,600 for the August rent. 2 Accepted a six month, 8% note in exchange for Chen Enterprises overdue account receivable of $100,000 3 Sale occount Chavier Lido, sem cost of goods. Eine company uses a perpetual inventory system 8 Determined that an account receivable from Densmore Lid. of $70,000 is uncollecuble. 9 A $300,000 partial payment on account was received from Clavier (see August 3 transaction). 10 Old equipment was sold for $6,000. The equipment's original cost was 564,000, accumulated depre- ciation to the date of disposal was $36,169. 14 Paid a $10,000 income tax instalment 21 Purchased a patent for $21,600 cash. The estimated useful life of the patent is five years; the legal life, 20 years 31 Recorded bank credit card sales from sales of digital Library images for the month, 575,000. The cost of goods sold is $35.000 31 The monthly bank statement revealed the following unrecorded items interest on bank loan, $1,500, and bank service charges, S1,130 which included credit card and other bank fees 31 Reviewed outstanding accounts receivable. Determined, through an aging of accounts, that doubt ful accounts totalled $320.000 at month end 31 Recorded depreciation for the month on the remaining equipment that cost $150,000 and is still in use. Useful life of all equipment is estimated to be four years with no residual value. The straight line method of depreciation is used and depreciation is calculated to the nearest month. 31 Recorded and paid salaries for the month of $100.000 31 Accrued interest on the Chen Enterprises not receivable (see August 2 transaction) 31 Recorded amortization on the patent (see August 21 transaction). A full months amortization is recorded on any intangible assets acquired during the month Instructions (a) Prepare Taccounts and enter the July 31 balance (b) Record the August transactions and adjustments (e) Post the journal entries from part (b) to the accounts (d) Prepare an adjusted trial balance August 31. (e) Prepare an (1) income statement. (2) statement of changes in equity, and (3) statement of financial position at August 31. Comprehensive Case: Chapters 3-9 Clear Images Lid. has been in operation for several years. It purchases, customizes, and sells studio sets for its clients. The Record and post company's post-closing trial balance at July 31, 2015, the end of its fiscal year, is presented below: transaction and adji ing journal entries: CLEAR IMAGES LTD. prepare adjusted tri balance and financi Post-Closing Trial Balance statements. July 31, 2015 (SO 2. 3.-4,5) Debit Credit Cash $ 170,000 Accounts receivable 2,700,000 Allowance for doubtful accounts $ 300,000 Merchandise inventory 500,000 194,000 Accumulated depreciation-equipment 73,669 ... Accounts payable 1,009,000 payable 350,000 Common shares 300,000 Retained earnings 1,531,331 $3,564,000 $3,564,000 Equipment Bank loan The company had a limited amount of business activity in August 2015 because of holidays for both the company and its major customers. You have been hired on a temporary basis to update the company's records for August. The August transactions and adjustments are presented below: Aug. 1 Paid $20,000 for office expenses and $3,600 for the August rent 2 Accepted a six-month, 8% note in exchange for Chen Enterprises overdue account receivable of $100,000. 3 Sale on account to Chavier Ltd. for $500,000, terms 2/10. n/30. Cost of goods sold, $270,000. The company uses a perpetual Inventory system. & Determined that an account receivable from Densmore Ltd. of $70,000 is uncollectible. 9 A $300,000 partial payment on account was received from Chavier (see August 3 transaction). 10 Old equipment was sold for $6,000. The equipment's original cost was $44.000; accumulated depre. ciation to the date of disposal was $36,169. 14 Paid a $10,000 income tax instalment. patent for $24,000 cash. The estimated useful life of the patent is five years, the legal life life, 20 years. 31 Recorded bank credit card sales from sales of digital library images for the month, $75,000. The 21 Purchased at cost of goods sold is $35,000. 31 The monthly bank statement revealed the following unrecorded items interest on bank loan, $1,500, and bank service charges , $1,130 which included credit card and other bank fees. 31 Reviewed outstanding accounts receivable. Determined, through an aging of accounts, that doubt- full accounts totalled $320,000 at month end. 31 Recorded depreciation for the month on the remaining equipment that cost $150,000 and is still in use. Useful life of all equipment is estimated to be four years with no residual value. The straight- line method of depreciation is used and depreciation is calculated to the nearest month. 31 Recorded and paid salaries for the month of $100,000. 31 Accrued interest on the Chen Enterprises' note receivable (see August 2 transaction). 31 Recorded amortization on the patent (see August 21 transaction). A full month's amortization is recorded on any intangible assets acquired during the month. Instructions (a) Prepare T accounts and enter the July 31 balances. (b) Record the August transactions and adjustments. (c) Post the journal entries from part (b) to the T accounts. (d) Prepare an adjusted trial balance at August 31. (c) Prepare an (1) income statement, (2) statement of changes in equity, and (3) statement of financial position at August 31. Comprehensive Case: Chapters 3-9 transaction Clear Images Ltd. has been in operation for several years. It purchases, customises, and sells studio sets for its dients. The Record and company's post-closing trial balance at July 31, 2015, the end of its fiscal year, is presented below ing journal prepare adid CLEAR IMAGES LTD. balance and Post-Closing Thal Balance statements July 31, 2015 (SO2, 3., Deber Credit Cash & $ 170,000 Accounts receivable 2.700.000 Allowance for doubtful accounts $ 300,000 Merchandise inventory 500,000 Equipment 190.000 Accumulated depreciation-equipment 73.469 Accounts payable 1.009.000 Bank loan payable 350,000 Common shares 300,000 Retained earning 1,531,331 $3.564.000 53.564,000 The company had a limited amount of business activity in August 2015 because of holidays for both the company and its major customers. You have been hired on a temporary hasis to update the company records for August. The August transactions and adjustments are presented below: Aug 1 Paid $20,000 for office expenses and $3,600 for the August rent. 2 Accepted a six month, 8% note in exchange for Chen Enterprises overdue account receivable of $100,000 3 Sale occount Chavier Lido, sem cost of goods. Eine company uses a perpetual inventory system 8 Determined that an account receivable from Densmore Lid. of $70,000 is uncollecuble. 9 A $300,000 partial payment on account was received from Clavier (see August 3 transaction). 10 Old equipment was sold for $6,000. The equipment's original cost was 564,000, accumulated depre- ciation to the date of disposal was $36,169. 14 Paid a $10,000 income tax instalment 21 Purchased a patent for $21,600 cash. The estimated useful life of the patent is five years; the legal life, 20 years 31 Recorded bank credit card sales from sales of digital Library images for the month, 575,000. The cost of goods sold is $35.000 31 The monthly bank statement revealed the following unrecorded items interest on bank loan, $1,500, and bank service charges, S1,130 which included credit card and other bank fees 31 Reviewed outstanding accounts receivable. Determined, through an aging of accounts, that doubt ful accounts totalled $320.000 at month end 31 Recorded depreciation for the month on the remaining equipment that cost $150,000 and is still in use. Useful life of all equipment is estimated to be four years with no residual value. The straight line method of depreciation is used and depreciation is calculated to the nearest month. 31 Recorded and paid salaries for the month of $100.000 31 Accrued interest on the Chen Enterprises not receivable (see August 2 transaction) 31 Recorded amortization on the patent (see August 21 transaction). A full months amortization is recorded on any intangible assets acquired during the month Instructions (a) Prepare Taccounts and enter the July 31 balance (b) Record the August transactions and adjustments (e) Post the journal entries from part (b) to the accounts (d) Prepare an adjusted trial balance August 31. (e) Prepare an (1) income statement. (2) statement of changes in equity, and (3) statement of financial position at August 31