Winter 2023 combined section-Protected View Saved to this PC Design Layout References Mailings Review View Help Search hom the internet can contain viruses. Unless you need to edit, it's safer to stay in Protected View Enable Editing 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. 1. The company has a two year insurance policy that was taken out on May 1, 2022. 2. 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% 3. The company wrote off a customer for $10. The company estimates that 4% of the ending accounts receivable balance will not be collected. 4. The building was purchased 5 years ago. It has an estimated usefill life of 20 years and a residual value of $20. 5. 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. 6. The company stopped business and physically counted inventory. Their inventory count at the end of the year was $202. 7. On October 1" 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. 8. 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 is on Saturday Q PO net can contain viruses. Unless you need to edit, it's safer to stay in Protected View. Complete your assignment in the excel spreadsheet provided. i IL Enable Editing Prepare any necessary journal entries and adjusting entries for December 31, 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) I W 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) Peer evaluation (4 marks) 401 Search b ame of each student in group Enable Editing A 5 D 6 Save 7 Adjusting entries Account Amount Amount Dr. Cr. B 1 9 10 11 2 12 13 14 3 15 16 17 A 10 19 201 5 21 22 23 6 24 25 26 7 27 26 Close Sheet Sheet2 Sheets Q E You may need to add rows were applicable ENG 5 284 2015-03-19 E Adjustments 20 29 30 Rowe Inc. files. Save 31 Trial balance Dr 32 Cash 33 Accounts receivable cer 2021 Cr. Dr. 125 400 34 Allowance for doubtful accounts me the 35 Inventory 15 210 36 Prepaid insurance 60 37 Supplies 16 38 Land 100 39 Building 120 40 Accumulated depreciation 20 41 Tradename 42 Accounts payable 43 Wages payable 44 Unearned revenue 45 Comeon shares 48 Retained earnings 7 47 Sales revenue 250 60 110 2000 48 Cost of goods sold 140 43 Wages expense 1530 50 insurance expense O 51 Depreciation expense total 2209 2455 53 54 Discontinued Operations S saval 5 Close Sheet! Sheet2 Sheet3 Search P a Adjusted trial balance cr. Dr cr. ENG US 984 54 PM 2023-19-11 of each student in group Insurance expense B 50 51 52 53 54 55 S2O3RRANSE Depreciation expense total Discontinued Operations 56 57 58 59 Revenue recognition 60 61 1 62 2 63 3 Close 3930 S ORE Sheet Criteria Sheet2 Sheet3 Q Search D 2709 2455 Supporting fact Paste BIU Undo Clipboard Al .. T Xfx Adjusting entries Account 1 " 2 M 3 A S 6 134 IN Font A Dr. 18 L Sheet Sheet2 Sheet3 Alignment Seash L D 18 A A BIUA EES General $ -9 X Calibri la Paste Undo Clipboard A1 34 AL Font 60 Common shares 110 Retained earnings 212 550 140 208 872 Sheets Sheet2 Sheet3 9 Alignment Qech J Number B 6 Undo Clipboard Fy A1 vix fx Adjusting entries Account B Font T 8 1 3 10 11 2 12 13 14 3 15 16 17 4 10 9 201 5 21 22 23 6 24 125 26 7 27 25 25 Sheet1 D Dr. Cr. Sheet2 Sheet3 Ready TC Accessibility Investigate Mostly cloudy 12 Alignmen Q Search Paste BIU Undo Clipboard F Font Al vix vfx 33 04 55 06 ST 36 40 41 42 60 4 44 45 Common shares 110 AS Retained earnings 212 AT 550 140 68 Sheet Sheet2 Sheet Ready Masty Coudy 266 872 Alignment 9 Seach 104