Determine the adjustments needed on December 31, 2024. Prepare an income statement for Hometowne Bicycle for the year ended December 31, 2024. Hometowne 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 $22,200. The company recorded the amount in Prepaid Insurance on July 1 . The cost of insurance prior to July totals $3,900. 2. Employee salaries of $27,800 for the month of December will be paid in early January. Salaries paid in the first 11 months of the year totaled $218,000. 3. On November 1,2024 , the company received $10,200 in cash from a customer requesting a custom design for six identical bikes ( $1,700 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 $308,000. 4. Supplies at the beginning of the year totaled $4,800. During 2024 , additional supplies of $20,800 were purchased and recorded in Supplies at the time of purchase. Supplies remaining at the end of the year total $6,800. 5. Hometowne paid a local radio station $14,800 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 $16,400. 6. Hometowne borrowed $40,200 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 Hometowne 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 1 Required 2 >