Rowe Inc. has been in operations for approximately 5 years. It is a private company, so the company prepares financial statements once a year. The company has no plans in the near future to go public. See the excel file for the trial balance.

Rowe Inc.	Trial balance		Adjustments		Adjusted trial balance
		Dr.	Cr.	Dr.	Cr.	Dr.	Cr.
	Cash	125
	Accounts receivable	400
	Allowance for doubtful accounts		15
	Inventory	210
	Prepaid insurance	60
	Supplies	16
	Land	100
	Building	120
	Accumulated depreciation		20
	Tradename	8
	Accounts payable		250
	Wages payable
	Unearned revenue		60
	Common shares		110
	Retained earnings		?
	Sales revenue		2000
	Cost of goods sold	140
	Wages expense	1530
	Insurance expense
	Depreciation expense
	total	2709	2455

The company has a two year insurance policy that was taken out on May 1^st, 2022.

On August 1st Rowe Inc. converted a customer that owed $50 from an accounts receivable to a notes receivable. Rowe Inc. borrows funds at 4% and the customer borrows funds at 5%

The company wrote off a customer for $10. The company estimates that 4% of the ending accounts receivable balance will not be collected.

The building was purchased 5 years ago. It has an estimated useful life of 20 years and a residual value of $20.

During the year the company purchased $2 in supplies. This has already been recorded. At the end of the year it was determined that there are $4 in supplies.

The company stopped business and physically counted inventory. Their inventory count at the end of the year was $202.

On October 1^st Rowe Inc. collected money in advance from Zinc Inc. to provide consulting services over the next 8 months. The work will be done evenly over the contract.

Employees are paid every Monday for the previous work week. They work Monday to Friday. There are 3 employees and they each make $10 per week. This year December 31^st is on Saturday.

Complete your assignment in the excel spreadsheet provided.

Prepare any necessary journal entries and adjusting entries for December 31^st, 2022. Show your calculations. (18 marks)

Figure out what opening retained earnings is assuming there are no errors in the trial balance. Put your adjustments in the adjustment columns and then prepare an adjusted trial balance (6 marks)

If the company decided to dispose of their Montreal division and this meet the criteria for a discontinued operation. The revenue for the division was $110 and expenses for the division were $124. The equipment had a cost of $20 and accumulated depreciation of $5. The company estimates that they can sell the equipment for $11 less $2 in auction costs. Prepare the discontinued operations section of the income statement. Assume the tax rate is 25%. (4 marks)

Assume that the company sold 10 gift cards to customers for $20 each in December. The customers pay cash in December. The customers use the 6 gifts cards in January and the 4 gift cards in February. Explain when revenue should be recognized. Be sure to use GAAP to support your answer. (8 marks)