Chesapeake Bay Kayak Rentals (CBKR) is located near the mouth of the Lynnhaven River on the Chesapeake Bay in Virginia Beach, VA, and rents kayaks and paddle boards to be used on the bay and the Lynnhaven River in addition to providing tours. Matt Redfern decided to start the business because of his love for the water and outdoors. Matt decided to incorporate the business to limit his legal liability. The business began operations April 1, 2021, and has a December 31 year end. Matt has asked you to prepare Chesapeake Bay Kayak Rentals' financial statements for the nine months ended December 31, 2021. He has been doing his own accounting but isn't sure if he's done everything correctly since he only took principles of financial accounting in college. He has provided you with an unadjusted trial balance at December 31, 2021. Chesapeake Bay Kayak Rentals Trial Balance December 31, 2021 Unadjusted Debit Credit Cash 43,640 Accounts Receivable 4,500 9,600 Prepaid Insurance Supplies Land Building Accumulated Depreciation - Building Computer Equipment Accumulated Depreciation - Computer Equipment Kayaks, paddleboards, and life vests (equipment) Accumulated Depreciation- Equipment Accounts Payable Wages Payable Interest Payable Note Payable Unearned Revenue Common stock, $ 5 par (4,000 shared issued and outstanding) Paid In Capital In Excess of Par Retained Earnings Rental Revenue Advertising Expense Depreciation Expense - Building Depreciation Expense - Equipment Depreciation Expense - Computer equipment Insurance Expense Interest Expense Supplies Expense Utilities Expense 600 330,000 2,800 17,300 6,850 318,144 1,500 20,000 12,000 124,435 6,832 8,532 Telephone and Internet Expense Wages Expense Income Summary 1,485 57,640 OTALS 482,929 482,929 In addition to the trial balance, he has provided you with the following information (Round all items to nearest whole dollar.): a. Annual liability insurance premium of $9,600 was paid April 2, 2021. Record appropriate insurance expense for the period ending December 31. b. Katie, the only employee, worked 16 hours on December 30 and 31 for which she has not been paid. She earns $15/hour. c. A physical count shows $165 of supplies on hand at December 31. d. CBKR purchased land/building on April 1, 2021, for $330,000. He has not separated the value of the land from the building. The appraisal performed at the time of purchased assessed the land at $270,000 and the building at $90,000. Properly allocated the purchase price between the land and the building with an adjusting entry. e. Building purchased on April 1, 2021, is expected to have a useful life of 40 years with no salvage value. Matt has chosen to use the straight-line method of depreciation based on number of months in service. Round expense to nearest whole dollar. f. CBKR financed 100% of the cost of the land/building with a 30 year note payable with monthly payments of $1,482, and an interest rate of 3.5%. His first payment was made May 1, 2021. Matt tells you he posted the entire amount of each payment (8) against the note payable account. You will need to prepare an AJE to reclassify interest portion of payments to Interest expense. (Note: Prepare an amortization schedule using an excel template. Loan amount: $330,000, annual interest rate:3.5%, loan period in years: 30, number of payments per year: 12, start date of loan: 5/1/21, optional extra payments: $0; scheduled payment should equal $1,481.85. Matt rounded up and is paying $1,482/month.) Save amortization schedule as part of workbook (file). g. December interest on the note payable is due on January 1, 2022, with the January 1 payment. Accrue December interest expense h. Kayaks, paddle boards, and life vests (equipment) were purchased on April2, 2021, at a cost of $17,300. This equipment is expected to have a service life of five years and a salvage value of $2,300. The straight-line depreciation method is used. i. Computer equipment with a value of $2,800 was acquired April 1, 2021 and is expected to have a seven year life with no salvage value. Straight-line method of depreciation is used. b. File should include four worksheets: trial balance, adjusting entries, amortization schedule, and financial statements. c. Using the trial balance worksheet prepare the unadjusted trial balance and include columns for the adjusting entries and adjusted trial balance. 307 CB Kayak Rental Excel Assignment 2. Use the information provided to prepare adjusting journal entries in the Adjusting entries worksheet and then post these to the trial balance worksheet. a. Column totals should be calculated using SUM formula b. Calculate adjusted balances using IF formulas. Net income should equal $29,367. 3. Copy the amortization schedule you created above to the Amortization worksheet or move to your assignment file and rename tab. 4. Prepare the following statements: a. Single step income statement - use formula to calculate total expenses and net income b. Statement of retained earnings - use formula to create ending retained earning balance, use cell reference for net income c. Classified balance sheet use formulas for all subtotals and totals. Note: determine current portion of note payable from amortization schedule and include in current liability section. Remember to subtract this from NP balance for non-current portion.