Section BFinancial Statements Preparation (40 marks)

Innovative Design Corporation (IDC) is a merchandizing company that specializes in motor vehicles.The company was formally established on June 1^st, 2017 by issuing shares to investors.Inventory of IDC is accounted for by specific identification, perpetual inventory system.Straight-line depreciation is used for all the plant assets. Useful lifes for building, furniture and fittings and motor vehicle are 30 years, 15 years and 10 years respectively.No residual value is expected. IDC records a full month's depreciation in the month of acquisition, and no depreciation in the month of disposal.Financial statements of IDC are prepared for each month.The post-closing trial balance of IDC as at July 31^st, 2018 is as follows:

Innovative Design Corporation POST-CLOSING TRIAL BALANCE- AS AT JULY 31st 2018- Account Balance ($) Debit Credit Cash 4,182,580 Accounts Receivable 24,722,000 Inventory 15,368,000 Prepaid Rent 480,000 Supplies 18,000 Building 36,500,000 Accumulated Depreciation - Building 1,419,444 Motor Vehicle 1,800,000 Accumulated Depreciation - Motor Vehicle 150,000 Furniture and Fittings 1,530,000 Accumulated Depreciation - Furniture and Fittings 34,000 Accounts Payable 18,848,500 Notes Payable (repayable Dec 31, 2018)