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(Solved): Rowe Inc. has been in operations for approximately 5 years. It is a private company, so the company ...





Rowe Inc. has been in operations for approximately 5 years. It is a private company, so the company prepares financial statem
i. Prepare any necessary journal entries and adjusting entr 5 for December \( 31^{\text {st }}, 2022 \). Show your calculatio
v. Assume that the company sold 10 gift cards to customers for \( \$ 20 \) each in December. The customers pay cash in Decemb
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 . 2. On August 1st Rowe Inc. converted a customer that owed from an accounts receivable to a notes receivable. Rowe Inc. borrows funds at and the customer borrows funds at 3. The company wrote off a customer for . The company estimates that of the ending accounts receivable balance will not be collected. 4. The building was purchased 5 years ago. It has an estimated useful life of 20 years and a residual value of . 5. During the year the company purchased in supplies. This has already been recorded. At the end of the year it was determined that there are in supplies. 6. The company stopped business and physically counted inventory. Their inventory count at the end of the year was . 7. On October 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 per week. This year December is on Saturday: i. Prepare any necessary journal entries and adjusting entr 5 for December . Show your calculations. (18 marks) ii. 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) iii. 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 and expenses for the division were . The equipment had a cost of and accumulated depreciation of . The company estimates that they can sell the equipment for less in auction costs. Prepare the discontinued operations section of the income statement. Assume the tax rate is . (4 marks) v. Assume that the company sold 10 gift cards to customers for 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)


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Adjusting entry for prepaid insurance;Prepaid insurance = 2 years x $50= $1,000Insurance expense = $1,000 / 2 = $500 (for the current year)Adjusting e
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