Mason Advertising Agency was founded in January 2008. Presented below are adjusted and unadjusted trial balances as of December 31, 2012.

Instructions(a) Journalize the annual adjusting entries that were made. (Omit explanations.)(b) Prepare an income statement and a statement of retained earnings for the year ending December 31, 2012, and an unclassified balance sheet at December 31.(c) Answer the following questions.(1) If the note has been outstanding 3 months, what is the annual interest rate on that note?(2) If the company paid $12,500 in salaries and wages in 2012, what was the balance in Salaries and Wages Payable on December 31,2011?

Transcribed Image Text:

MASON ADVERTISING AGENCY TRIAL BALANCE DECEMBER 31, 2012 Adjusted Unadjusted Dr. $ 11,000 Cr. Dr. Cr. $ 11,000 23,500 3,000 2,500 60.000 Cash Accounts Receivable 20,000 8,400 3,350 Supplies Prepaid Insurance Equipment Accumulated Depreciation-Equipment 60,000 $ 28,000 $ 33,000 Accounts Payable Interest Payable Notes Payable 5,000 -0- 5,000 150 5,000 7,000 -0- 10,000 3,500 5,000 5,600 1,300 10,000 Unearned Service Revenue Salaries and Wages Payable Common Stock Retained Earnings Service Revenue 3,500 63,500 58,600 Salaries and Wages Expense Insurance Expense Interest Expense Depreciation Expense Supplies Expense Rent Expense 11,300 850 500 10,000 350 5,000 5,400 4,000 4,000 $117,100 $117,100 $127,050 $127,050