Flynn Design Agency was founded by Kevin Flynn in January 2011.

Presented below is the adjusted trial balance as of December 31, 2015.

Instructions

(a) Prepare an income statement and a retained earnings statement for the year ending December 31, 2015, and an unclassified statement of financial position at December 31.

(b) Answer the following questions.
(1) If the note has been outstanding 6 months, what is the annual interest rate on that note?
(2) If the company paid €17,500 in salaries and wages in 2015, what was the balance in Salaries and Wages Payable on December 31, 2014?

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FLYNN DESIGN AGENCY ADJUSTED TRIAL BALANCE DECEMBER 31, 2015 Dr. Cr. Cash 10,000 Accounts Receivable 21,500 Supplies Prepaid Insurance Equipment 5,000 2,500 60,000 Accumulated Depreciation-Equipment Unearned Service Revenue Accounts Payable Interest Payable Notes Payable Salaries and Wages Payable 35,000 8,000 150 5,000 5,600 1,300 Share Capital-Ordinary Retained Earnings 10,000 3,500 Service Revenue 58,500 Salaries and Wages Expense 12,300 Insurance Expense 850 Interest Expense 500 Depreciation Expense 7,000 Supplies Expense 3,400 Rent Expense 4,000 127,050 127,050