As a recently accredited CPA you have joined a growing firm of CPAs, Cromdex LLP. As the calendar has turned to 2024, you have been asked to attend a meeting with one of the founding partners, Mr. James Cromartie. At the meeting, Mr. Cromartie welcomes you to the firm and hands you a file that contains the following for a long standing client, Standbro Corp.:

i. Notes of a Meeting with Standbros Management (Appendix I). ii. Draft Statement of Comprehensive Income for the year ended December 31, 2023 (Appendix II). iii. Draft Balance Sheet as at December 31, 2023 (Appendix III).

Standbro Corp. manufactures specialized grinding equipment. The equipment can be ordered by customers from a catalogue or specialized to a customers requirement.

Mr. Cromartie has asked you to review the Notes of the Meeting and prepare a report noting any adjusting journal entries that should be presented to the client. He specifically instructed that When preparing your report, focus on the current year only. We will consider any impact on the comparative numbers later. Also in your report, consider any matters of importance for Mr. Cromartie to review with the client. This report should also include two visualiations to assist in the understanding of the report. Please round any monetary amount to the nearest whole number.

During the meeting with management, Mr. Cromartie reviewed the minutes of the quarterly meetings of Standbros Board of Directors. During this review, it was noted that there were no Common Shares issued or purchased during 2023. Mr. Cromartie did note minutes of a special meeting of the Board where it was decided to cease the operations of the rubber pellet division. From that meeting, a formal plan was formulated and negotiations with potential buyers were ongoing during 2023. In his notes, Mr. Cromartie expressed uncertainty regarding the current standard on the appropriate presentation of this matter in the financial statements. The Company has provided draft internal financial statements of the rubber pellet division for the years 2023 and 2022 (Appendix V).

Please do the adjusting entries for the recommendation.

Notes: 1. Head office costs are allocated costs determined by the Head Office. 2. The interest expense is allocated by Head Office and is not representative of debt costs specific to the Rubber Pellet division. EXTRACTED FINANCIAL INFORMATION-RUBBER PELLET DIVISION Notes: 1. The fair value of the Inventory and Equipment is based on a written offer received from a local auction business. The Company is waiting for two other offers but has indicated the auction business offer is likely to be the best of the three possible offers. Other costs to close the sale are ignorable. 2. The fair value of the Land and Building is based on an independent appraisal provided by an experienced commercial property broker that has successfully sold comparable properties in the area. It is estimated the cost to dispose of the Land and Building would be approximately 10%. 3. Ignore any adjustment to depreciation