Please Answer Part B. If Part A is needed to answer Part B., please answer both questions.
2. The Accounting Cycle - End of the period (7pts): The Rosebud Motel, Inc has prepared its unadjusted trial balance as of 12/31/2020 and is now ready to make its adjusting entries at the end of its annual accounting period. Assume all accounts have their normal debit or credit balance. The following additional information was gathered at December 31, 2020, the end of the firm's annual accounting period. Assume Rosebud Motel uses an annual accounting period and all adjustments and adjusting entries are made only at the end of each annual accounting period (i.e. AJEs are only made on December 31st). No adjusting entries have been made yet for the year ending December 31, 2020 related to the below items: 1) On 1/1/2020, the beginning balance of the Supplies account was $3,940. During 2020, Rosebud Motel purchased $18,945 worth of additional supplies. A physical count of supplies indicates that there are only $5,180 worth of supplies remaining on hand as of 12/31/2020. 2) On September 29th, 2020, a customer paid $3,200 in advance for four months (i.e. $800 per month) of extended stay at the motel to begin October 1, 2020 through January 31, 2021. Rosebud Motel records this as Deferred Revenue on 9/29 at the time the customer paid cash. 3) Rosebud Motel purchased a building for $250,000 on October 1, 2013, which was recorded as Building. The building has $0 salvage value and has an estimated useful life of 25 years. Rosebud Motel uses the straight-line depreciation method to allocate the cost of the building evenly over its 25-year useful life. 4) On May 1st, 2020, Rosebud Motel borrowed $48,000 from the local bank, signing a note payable. This note is due in 8 years and has an annual interest rate of 6.5%. Rosebud pays interest every April 30th and the first interest payment is due on April 30th, 2021. 5) On January 1st, 2020, Rosebud Motel prepaid $72,000 in cash for a three-year insurance policy, covering the period of January 1st, 2020 - December 31, 2023. The firm recorded this as Prepaid Insurance on 1/1/2020. PART A: Record Adjusting Journal Entries (AJES) - 5pts: Record the AJEs related to the information above that Rosebud would make on 12/31/2020. Make sure to use proper formatting for all entries, and to include the date of each entry and a brief description of each entry. You must show all of your work on calculations to receive full credit. PART B: Calculate adjusted Net Income for 2020 - 1pts: In its unadjusted trial balance, as of 12/31/2020, the total of all revenue account balances for the 2020 annual accounting period was $591,422 and the total of all expense account balances for the 2020 annual accounting period was $486,420. Calculate the amount of Net Income that Rosebud Motel would report on its Income Statement for the year ended December 31st, 2020. You must show all of your work on calculations to receive full credit
