Buzzard 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.

A $3-$year fire insurance policy was purchased on July $1,2026,$ for $$18,000.$ The company recorded the amount in Prepald Insurance on July $1.$ The cost of Insurance prior to July totals $$2,500.$

Employee salarles of $$25,000$ for the month of December will be paid in early January. Salarles pald in the first $11$ months of the year totaled $$190,000.$

On November $1\mathrm{.}2026,$ the company recelved $$6,000$ in cash from a customer requesting a custom design for six Identical bikes each$).$ The entire amount is recorded in Deferred Revenue on November $1.$ By the end of the year, four of the bikes have been completed. Other revenues generated during the year total $$280,000.$

Supplies at the beginning of the year totaled $$2,000.$ During $2026,$ additional supplles of $$18,000$ were purchased and recorded in Supplies at the time of purchase. Supplles remaining at the end of the year total $$4,000.$

Buzzard pald a local radio station $$12,000$ for $4$ months of advertising on December $1,2026.$ The advertising will appear evenly over the $4-$month perlod. The company recorded the entire amount in Prepald Advertising on December $1.$ Advertising costs the first $11$ months of the year total $$15\mathrm{.}000$

Buzzard borrowed $$36,000$ on March $1,2026.$ The principal is due to be paid in $5$ years. Interest is payable each March $1$ at an annual rate of $10\%$

Required:

Determine the adjustments needed on December $31,2026.$

Prepare an income statement for Buzzard BIcycle for the year ended December $31,2026.$

Note: Amounts to be deducted should be Indlcated wlth a minus sign.

Complete this question by entering your answers in the tabs below.

Required $1$

Required $2$

Determine the adjustments needed on December $31,2026.$

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$\backslash$table$[[$December $31$ Ending balance$],[3.]]\}],[],[,$Deferred Revenue,Service Revenue$],[$Balance before adjustment,$],[$December $31$ Adjustment$],[$December $31$ Ending balance,$0,0],[$n$-$x$-$r$],[,$Supplies,Supplies Expense :$],[$Balance before adjustment,$0],[\backslash$table$[[$December $31$ Adjustment$],[$December $31$ Fndina$]]],[\{$

$\backslash$table$[[$December $31$ Ending balance$],[5.]]\}],[],[,$Prepaid Advertising,Advertising Expense$],[$Balance before adjustment$],[\backslash$table$[[$December $31$ Adjustment$],[$December $31$ Endina$]]],[\{$

$\backslash$table$[[$December $31$ Ending balance$],[6.]]\}],[],[,$Interest Expense,Interest Payable$],[$Balance before adjustment,$0,0],[\backslash$table$[[$December $31$ Adjustment$]],,],[$December $31$ Ending balance,$0,0]]$