Abulsa Bicycle specializes in custom painting and design of bicycles. December 31 is the company's fiscal year-end. Information necessary to prepare the year-end adjustments appears below 1. A three-year fire insurance policy was purchased on July 1, 2024, for $21,600. The company recorded the amount In Prepaid Insurance on July 1. The cost of insurance prior to July totals $3,700 2. Employee salaries of $27,400 for the month of December will be paid in early January. Salaries paid in the first 11 months of the year totaled $214,000. 3. On November 1, 2024, the company received $9,500 in cash from a customer requesting a custom design for six identical bikes ($1,600 each). The entire amount is recorded in Deferred Revenue on November 1. By the end of the year, four of the bikes have been completed. Other revenues generated during the year total $304,000. 4. Supplies at the beginning of the year totaled $4,400. During 2024, additional supplies of $20,400 were purchased and recorded in Supplies at the time of purchase. Supplies remaining at the end of the year total $6,400. 5. Abuisa paid a local radio station $14,400 for four months of advertising on December 1, 2024. The advertising will appear evenly over the four-month period. The company recorded the entire amount in Prepaid Advertising on December 1. Advertising costs the first 11 months of the year total $16,200. 6. Abuisa borrowed $39,600 on March 1, 2024. The principal is due to be paid in five years. Interest is payable each March 1 at an annual rate of 10% Required: 1. Determine the adjustments needed on December 31, 2024. 2. Prepare an income statement for Abuisa Bicycle for the year ended December 31, 2024.
Abulsa Bicycle specializes in custom painting and design of bicycles. December 31 is the company's fiscal year-end. Information necessary to prepare the year-end adjustments appears below 1. A three-year fire insurance policy was purchased on July 1, 2024, for $21,600. The company recorded the amount In Prepaid Insurance on July 1. The cost of insurance prior to July totals $3,700 2. Employee salaries of $27,400 for the month of December will be paid in early January. Salaries paid in the first 11 months of the year totaled $214,000. 3. On November 1, 2024, the company received $9,500 in cash from a customer requesting a custom design for six identical bikes ($1,600 each). The entire amount is recorded in Deferred Revenue on November 1. By the end of the year, four of the bikes have been completed. Other revenues generated during the year total $304,000. 4. Supplies at the beginning of the year totaled $4,400. During 2024, additional supplies of $20,400 were purchased and recorded in Supplies at the time of purchase. Supplies remaining at the end of the year total $6,400. 5. Abuisa paid a local radio station $14,400 for four months of advertising on December 1, 2024. The advertising will appear evenly over the four-month period. The company recorded the entire amount in Prepaid Advertising on December 1. Advertising costs the first 11 months of the year total $16,200. 6. Abuisa borrowed $39,600 on March 1, 2024. The principal is due to be paid in five years. Interest is payable each March 1 at an annual rate of 10% Required: 1. Determine the adjustments needed on December 31, 2024. 2. Prepare an income statement for Abuisa Bicycle for the year ended December 31, 2024.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Do not give answer in image
Transcribed Image Text:Abulsa Bicycle specializes in custom painting and design of bicycles. December 31 is the company's fiscal year-end.
Information necessary to prepare the year-end adjustments appears below.
1. A three-year fire insurance policy was purchased on July 1, 2024, for $21,600. The company recorded the amount
In Prepaid Insurance on July 1. The cost of insurance prior to July totals $3,700.
2. Employee salaries of $27,400 for the month of December will be paid in early January. Salaries paid in the first 11
months of the year totaled $214,000.
3. On November 1, 2024, the company received $9,600 in cash from a customer requesting a custom design for six
identical bikes ($1,600 each). The entire amount is recorded in Deferred Revenue on November 1. By the end of
the year, four of the bikes have been completed. Other revenues generated during the year total $304,000.
4. Supplies at the beginning of the year totaled $4,400. During 2024, additional supplies of $20,400 were purchased
and recorded in Supplies at the time of purchase. Supplies remaining at the end of the year total $6,400.
5. Abuisa paid a local radio station $14,400 for four months of advertising on December 1, 2024. The advertising will
appear evenly over the four-month period. The company recorded the entire amount in Prepaid Advertising on
December 1. Advertising costs the first 11 months of the year total $16,200.
6. Abulsa borrowed $39,600 on March 1, 2024. The principal is due to be paid in five years. Interest is payable each
March 1 at an annual rate of 10%.
Required:
1. Determine the adjustments needed on December 31, 2024.
2. Prepare an income statement for Abuisa Bicycle for the year ended December 31, 2024.
Note: Amounts to be deducted should be indicated with a minus sign.
Complete this question by entering your answers in the tabs below.
Required Required
1
2
Prepare an income statement for Abuisa Bicycle for the year ended December 31, 2024.
Abulsa Bicycle
Income Statement
For the Year Ended December 31, 2024
Expenses:
Total Expenses
< Required 1
Required 2 >
Transcribed Image Text:eBook
Print
Reference
Adjustment
December 31 Ending
balance
2.
Balance before
adjustment
December 31
Adjustment
December 31 Ending
balance
3.
Balance before
adjustment
December 31
Adjustment
December 31 Ending
balance
4.
Balance before
adjustment
December 31
Adjustment
December 31 Ending
balance
5.
Balance before
adjustment
December 31
Adjustment
December 31 Ending
balance
6.
Balance before
adjustment
December 31
Adjustment
December 31 Ending
balance
Salaries
Payable
Deferred
Revenue
Supplies
Prepaid
Advertising
Interest
Payable
0
Salaries
Expense
Service
Revenue
Supplies
Expense
Advertising
Expense
Interest
Expense
0
0
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education