Crane French Modern Retailers Ltd. has been in operation for several years. It wholesales furniture to its customers. The company's post-closing trial balance at July 31, 2021, the end of its fiscal year, is presented below: CRANE French Modern Retailers Ltd. Post-Closing Trial Balance July 31, 2021 Debit Credit Cash $ 161,660 Accounts receivable Allowance for doubtful accounts 2,527,200 $311,700 Inventory 499,400 Estimated inventory returns 54,000 Equipment 202,990 Accumulated depreciation-equipment 73,027 niventory Estimated inventory returns 54,000 Equipment 202,990 Accumulated depreciation-equipment Accounts payable Refund liability Bank loan payable (due in 4 years) 73,027 1,036,850 100,000 321,500 Common shares Retained earnings 289,200 1,303,973 $3,433,250 $3,436,250 The company had a limited amount of business activity in August 2021 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: The company had a limited amount of business activity in August 2021 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 $20,200 for office expenses and $3,385 for the August rent. 2 Accepted a six-month, 8% note in exchange for Chen Enterprises' overdue account receivable of $93,000. 3 8 9 10 Sale on account to Chavier Ltd. for $496,200. Cost of goods sold, $257,010. The company uses a perpetual inventory system and estimates that inventory sold for $50,000 (cost $27,000) will likely be returned. Determined that an account receivable from Densmore Ltd. of $75,160 is uncollectible. A $298,900 partial payment on account was received from Chavier (see August 3 transaction). Old equipment was sold for $5,700. The equipment's original cost was $38,590; accumulated depreciation to the date of disposal was $31,644. 14 Paid a $9,060 income tax instalment. 21 Purchased a patent for $24,300 cash. The estimated useful life of the patent is five years; the legal life. 20 years. 28 Inventory sold on credit for $60,000 and costing $32,400 was returned by customers. 28 Inventory sold on credit for $60,000 and costing $32,400 was returned by customers. 31 Recorded cash received from sales for the month, $72,010. The cost of goods sold is $37,700. 31 31 31 The monthly bank statement revealed the following unrecorded items: interest on bank loan, $1,640, and bank service charges, $1,232. Reviewed outstanding accounts receivable. Determined, through an aging of accounts, that doubtful accounts totalled $304,550 at month end. Recorded depreciation for the month on the remaining equipment that cost $164,400 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, $103,000. 31 Accrued interest on the Chen Enterpriss 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. Post the journal entries from part (a) to the accounts. (Post entries in the order of journal entries presented in the previous part. Round answers to O decimal places, e.g. 5,275.) July 31, 2021 Aue. 1 Cash 161,660 20200 Aue. 1 3385 Aug. 9 298900 Accounts Receivable July 31, 2021 2,527,200 Allowance for Coubtful Accounts July 31, 2021 311,700 July 31, 2021 311,700 Interest Receivable Notes Deceivable Inventory July 31, 2021 490,400 Equipment July 31, 2021 202,990 Accumulated Depreciation-Equipment 73,027 July 31, 2021 Patents Accumulated Amortization-Patents Accounts Payable Bank Loan Payable July 31, 2021 321,500 Common Shares July 31, 2021 289,200 Retained Earnings July 31, 2021 1,303,973 Sales Interest Income Cost of Goods Sold Cost of Goods Sold Depreciation Expense Amortization Expense Amortization Expense Salaries Expense Bad Debts Expense Office Expense Rent Expense Bank Charges Expense Loss on Disposal Income Tax Expense