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 1st, 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 1st 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 31st is on Saturday. Complete your assignment in the excel spreadsheet provided. Prepare any necessary journal entries and adjusting entries for December 31st, 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)