The Maximum Group Limited $($MGL$)$ is a publicly listed organization based in Australia. MGL manufactures and sells high quality windows. MGL$\text{'}$s fiscal year end is DeYou have been hired by the Corporate Controller to provide assistance in accurately identifying and posting the adjusting entries necessary to ensure reliable financial statements are prepared for year end. You have also been asked to provide draft financial statements $($see details noted below in the Required section$).$

MGL$$s account balances as of December $31,2022,$ before adjusting entries are in Canadian dollars:cember $31.$

Accounts Payable CR $$235,000$

Accounts Receivable DR $$1,450,000$

Accrued Liabilities CR $$389,000$

Accumulated depreciation $-$ plant and equipment CR $$30,000$

Advertising Expense DR $410,000$

Allowance for doubtful accounts CR $32,000$

Bad debt expense DR $20,000$

Bonds Payable CR $1,300,000$

Cash DR $3,400,000$

Common shares, $25,000$ no$-$par shares issued CR $3,500,000$

Cost of goods sold DR $770,000$

Goodwill DR $2,900,000$

Intangible assets DR $780,000$

Interest Expense DR $270,000$

Inventory DR $470,000$

Land DR $3,340,000$

Office Expense DR $620,000$

Office Supplies DR $7000$

Plant and Equipment DR $257,000$

Prepaid Insurance DR $120,000$

Retained Earnings CR $6,828,000$

Salaries and wages Expense DR $1,700,000$

Sales CR $4,200,000$

The Controller has provided the following information for the year$-$end, $($assume these adjustments have NOT been recorded, unless otherwise specified$)$:

$1.$ MGL uses the percentage$-$of$-$receivables method to calculate the bad debt provision each year. MGL has estimated this allowance should be $$40,000$ at the end of the year $($at December $31,2022).$

$2.$ During the last quarter of $2022,$ an additional $1,000$ shares were issued for cash at $$200$ per share. The accounting for this entry was missed so MGL needs to record this transaction.

$3.$ The prepaid insurance account relates to an amount paid for a $12-$month fire insurance policy. The policy commenced on August $1,2022.$

$4.$ A year end count of office supplies was completed. Office supplies on hand are $$5,600.$

$5.$ A dividend of $$0\mathrm{.}50$ per share was declared on December $15.$ This has not yet been recorded. $($MGL records all dividends declared with a debit to a dividends account$).$ Payment is anticipated $60$ days following declaration of the dividends.

$6.$ The plant and equipment were acquired on January $1,2019,$and were being amortized on a straight$-$line basis over $20$ years with a residual value of $$57,000.$ As of January $1,2022,$ MGL revised the estimated residual value of the building and equipment to $$70,000$ and the remaining useful life to $10$ years $($total useful life of $13$ years, with $3$ years already depreciated$).$ Depreciation has not yet been recorded for $2022.$

$7.$ MGL paid $$348,000$ for advertising in magazines for the period March $1,2022,$ to February $28,2023.$ The full amount was recorded as advertising expense.

$8.$ Employees earned $$22,000$ during December that have not yet been paid or recorded. This amount is expected to be paid January $5,2023.$

$9.$ MGL$`$s plan for expansion to increase the number of stores in the year by $200,$ was financed August $1,2022,$ with the issuance of $11\%$ par value bonds in the amount of $$600,000,$ maturing on July $31,2024.$ The original amount financed has been correctly recorded. Interest was paid and recorded on April $1$ and October $1.$ Interest has not been accrued for the period October $2022$ to December $2022.$

$10.$ MGL received $$100,000$ from a customer midway through the $2022$ year and is required to deliver goods to the customer by or on March $31,2023.$ The entry for the deposit was recorded as Sales.

$11.$ MGL plans to produce a film aimed at raising awareness of environmentally friendly materials for windows. On April $1,2022,$ MGL paid an amount of $$50,000$ to an advertising company for services to be provided in $2023.$ The transactional entry was incorrectly recorded as a debit to Land.

$12.$ The income tax rate for MGL is $25\%.$ Capital Cost Allowance on plant and equipment is $$20,000$ in $2022$ and the company wants to maximize its tax deductions. Office expenses also included $$10,000$ for meals and entertainment and $$20,000$ for golf club dues for the company President.

REQUIRED:

$1.$ Identify and prepare all required entries. This includes all adjusting entries. Include all calculations, where applicable. The calculations of adjusting entries should be shown underneath the journal entry. Descriptions of the journal entries are NOT required. Create any new accounts which may be needed $($i$.$e$.,$ Depreciation expense$).$

$2.$ Post transactions to the worksheet and complete the worksheet $($including the Adjusted Trial Balance$).$

$3.$ Prepare:

$1.$ Closing entries

$2.$ Classified Statement of Financial Position

$3.$ Multi$-$step income statement

$4.$ Statement of Retained Earnings

OTHER IMPORTANT INFORMATION

$$ Round financial statements to the nearest dollar.

$$ Show ALL calculations.