Problem 2 Chapters 2-3 Cumberland City Cycles, Incorporated (CCC) rents bicycles of all kinds for use on the biking paths up and down the Cumberland River. The Excel file, Problem 2 Excel Template, includes tabs for: The Unadjusted Trial Balance, T-accounts, with the unadjusted amounts, An outline for the Adjusted Trial Balance, An automatically filled set of financial statements. Review the tabs carefully. The Adjusted Trial Balance is equal to the Unadjusted Trial Balance at this point-no adjusting entries have been made. The financial statements are complete- with amounts before adjustments. Note that Net Income is $3,050 now. Watch what happens as you enter the adjusting entries Below are the necessary adjusting entries that are to be recorded. ALL adjustments are made on an annual basis each December 31. Using the information below, and the amounts on the Un adjusted Trial Balance, prepare the adjusting entries in the T-accounts on the Excel spreadsheet. (A journal page is provided on the following page if you prefer to make the entries in general joumal form first and then put into the T-accounts.) Round all amounts to whole dollars. a) CCC counted the inventory of supplies and there is $200 on hand. b) On November 1, 2021, CCC paid in advance $3,000 for 4 months' rent on a small warehouse to store some of the bicycles for the winter months. c) On March 1, 2021, CCC paid in advance 1,200 for a one-year insurance policy. d) The equipment was purchased on January 1, 2021 for $10,000. The equipment has a useful life of 9 years with a residual value of $1,000 (Use the straight-line depreciation method.) e) A local youth group made an agreement with CCC for a winter season pass for its members. They paid CCC S400 in advance for bicycle rentals from November 1, 2021 through March 1, 2022 The note payable was issued on August 1, 2021. The note is a one year, 9% note for $10,000. Record the adjustment for the interest that has accrued. C Cuand City Cyline Cuma Clyde For the Year Ended December 31, 2001 31- CH Revenue 100 2.500 10 1000 1200 Predare 750 10 Ad Derecho 10 000 TA 500 Accounts Paya Undeve 7550 10000 3050 Common Stock Total & RE 5000 2.550 Cumhurand Chylene For the Year End December Alice 3.050 500 2 Unated Trial Balance Adidace D E B C Cumberland City Cycles, Inc. Adjusted Trial Balance 31-Dec-21 CR DR 2,500 750 1,000 1,200 3,000 10,000 1 2 3 4 5 6 Cash 7 Accounts Receivable 8 Supplies 9 Prepaid Rent 10 Prepaid Insurance 11 Equipment 12 Accumulated Depreciation 13 Accounts Payable 14 Unearned Revenue 15 Notes Payable 16 Interest Payable 17 Common Stock 18 Dividends 19 Retained Earnings 20 Rental Revenue 21 Salaries Expense 22 Advertising Expense 23 Utilities Expense 24 Insurance Expense 25 Rent Expense 26 Supplies Expense 27 Depreciation Expense 28 Interest Expense 29 30 500 400 10,000 5,000 500 10,700 6,300 750 600 26,600 26,600 31 32 Print Are 2.500 Accounts Receivable 750 1000 3,000 1200 10.000 2,500 750 1,000 3.000 1,200 Accu Drac Account Pay No Pay 10 Common 500 400 5,000 90.00 6.30 Avenge 750 500 500 10.700 5.00 surance Expert Harp A1 C Cumberland City Cycles, Inc. Unadjusted Trial Balance 31-Dec-21 N CR DR 2,500 750 1,000 3,000 1,200 10,000 500 400 10,000 1 2 3 4 5 6 Cash 7 Accounts Receivable 8 Supplies 9 Prepaid Rent 10 Prepaid Insurance 11 Equipment 12 Accumulated Depreciation 13 Accounts Payable 14 Unearned Revenue 15 Notes Payable 16 Interest Payable 17 Common Stock 18 Dividends 19 Retained Earnings 20 Rental Revenue 21 Salaries Expense 22 Advertising Expense 23 Utilities Expense 24 Insurance Expense 25 Rent Expense 26 Supplies Expense 27 Depreciation Expense 28 Interest Expense 29 30 31 32 5,000 500 10,700 6,300 750 600 26,600 26,600 D C Cumberland City Cycles, Inc. Unadjusted Trial Balance 31-Dec-21 CR DR 2,500 750 1,000 3,000 1,200 10,000 500 400 10,000 3 4 5 6 Cash 7 Accounts Receivable 8 Supplies 9 Prepaid Rent 10 Prepaid Insurance 11 Equipment 12 Accumulated Depreciation 13 Accounts Payable 14 Unearned Revenue 15 Notes Payable 16 Interest Payable 17 Common Stock 18 Dividends 19 Retained Earnings 20 Rental Revenue 21 Salaries Expense 22 Advertising Expense 23 Utilities Expense 24 Insurance Expense 25 Rent Expense 26 Supplies Expense 27 Depreciation Expense 28 Interest Expense 29 30 5,000 500 10,700 6,300 750 600 26,600 26,600 31 32 33 34 H 3 M N O Cash 2.500 Accounts Receivable 750 Supplies Prepaid Rent 3,000 1.200 10.000 2,500 750 1,000 3,000 1,200 10.000 Accumulated Depreco Accounts Pay 500 Uneaed Rover 400 Nos Payable 10.000 5.000 500 400 10,000 Didende 500 Het Reverse 50,700 100 750 10.700 6,100 500 750 Rant pense Suportes per Depreciso pensa Insurance Expense C D Cumberland City Cycles, Inc. Adjusted Trial Balance 31-Dec-21 CR DR 2,500 750 1,000 1,200 3,000 10,000 500 400 10,000 Cash Accounts Receivable Supplies Prepaid Rent Prepaid Insurance Equipment Accumulated Depreciation Accounts Payable Unearned Revenue 5 Notes Payable 6 Interest Payable 17 Common Stock 18 Dividends 19 Retained Earnings 20 Rental Revenue 21 Salaries Expense 22 Advertising Expense 23 Utilities Expense 24 Insurance Expense 25 Rent Expense 26 Supplies Expense 27 Depreciation Expense 28 Interest Expense 5,000 500 10,700 6,300 750 600 29 26,600 26,600 30 31 32 33 34 35 36 37 38 39 40 C D Trance Cumberland City Cycles, Inc. Income Statement For the Year Ended December 31, 2021 Cumberland City Cycles, ne Balance Sheet 31-00-21 CR OR REF Raven Rant Reve 10.700 2.500 10,700 Expenses Assal Coah Accounts Receivable So Prepaid Preparece Fun Accumulated Depreciation To se 1000 1,200 3000 11 30 750 500 10,000 10.000 13 Adversing Expense Insurance Expense Ratpense Supplies Expense Deprecation Experte Expose Tops 15 16 Accounts Paya Unnamed Raven No Pay Pay 400 10000 760 18 19 20 Notice 3.050 5000 Comment Range REF To 18.450 23 25 Cumberland City Cycles, Inc. Sant of For the Year Ended December 31, 20 Beginning and Gaming Add income Lewidende Ending and is 500 2550 23 23 29 30 31 32 33 36 15 36 37 38 35 T-Acets Adjusted Trial Balance Financial Statements Unadjusted Trial Balance