Rowland Company was organized on January 1, 2010. At the end of the first year of operations, December 31, 2010, the bookkeeper prepared the following trial balances (amounts in thousands of dollars):

Required:
1. Based on inspection of the two trial balances, prepare the 2010 adjusting entries recorded by the bookkeeper (provide brief explanations).
2. Based on these data, prepare the 2010 closing entries with brief explanations.
3. Answer the following questions (show computations):

a. How many shares were outstanding at year-end?

b. What was the amount of interest expense included in the total expenses?

c. What was the balance of retained earnings on December 31, 2010?

d. What was the average income tax rate?

e. How would these two accounts, rent receivable and deferred rent revenue, be reported on the statement of financial position?

f. Explain why cash increased by \(\$ 40,000\) during the year even though profit was comparatively very low.
g. What was the amount of earnings per share for 2010?
\(h\). What was the average selling price of the shares?
i. When was the insurance premium paid and over what period of time did the coverage extend?
\(j\). What was the net profit margin ratio for the year?
\(k\). What was the return on equity ratio for the year?

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Account No. 11 Cash 12 Trade receivables 13 Prepaid insurance Account Titles Debit 40 17 2 14 Rent receivable 15 Property, plant, and equipment 46 16 Accumulated depreciation Unadjusted Trial Balance Adjustments Adjusted Trial Balance Credit Debit Credit 40 17 1 2 46 11 17 Other assets. 18 Trade payables 6 27 6 27 19 I Wages payable 3 20 Income taxes payable 5 21 Deferred rent revenue 4 22 Note payable (10%; dated January 1, 2010) 201 20 23 Share capital (1,000 shares) 30 30 24 Relained earnings 3 3 25 Revenues (total) 105 103 26 Expenses (total including interest) 68 83 27 Income tax expense 5 Totals 182 182 203 203