Mason Advertising Agency was founded in January 2018. The following are adjusted and unadjusted trial balances as of December 31, 2022.

Instructions

a. Journalize the annual adjusting entries that were made.

b. Prepare an income statement and a retained earnings statement for the year ending December 31, 2022, and an unclassified statement of financial position 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 in 2022, what was the balance in Salaries and Wages Payable on December 31, 2021?

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Mason Advertising Agency Trial Balance December 31, 2022 Unadjusted Adjusted Dr. Cг. Dr. Cr. Cash € 11,000 € 11,000 Accounts Receivable 20,000 23,500 Supplies 8,400 3,000 Prepaid Insurance 3,350 2,500 Equipment 60,000 60,000 Accumulated Depreciation-Equipment € 28,000 € 33,000 Accounts Payable Interest Payable 5,000 5,000 -0- 150 Notes Payable 5,000 5,000 Unearned Service Revenue 7,000 5,600 Salaries and Wages Payable -0- 1,300 Share Capital-Ordinary Retained Earnings 10,000 10,000 3,500 3,500 Service Revenue 58,600 63,500 Salaries and Wages Expense 10,000 11,300 Insurance Expense 850 Interest Expense 350 500 Depreciation Expense 5,000 Supplies Expense 5,400 Rent Expense 4,000 €117,100 €117,100 €127,050 €127,050 4,000