In this simulation, you will be asked various questions regarding the accounting information system.

Prepare responses to all parts Nalezny Advertising Agency was founded by Casey Hayward in January 2002. Presented below are both the adjusted and unadjusted trial balances as of December 31, 2005.

Journalize the annual adjusting entries that were made.

Financial Statements Prepare an income statement for the year ending December 31, 2005, and a balance sheet at December 31.
Explanation Describe the remaining steps in the accounting cycle to be completed by Nalezny for 2005.

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Cash Accounts Receivable Art Supplies Printing Equipment Nalezny Advertising Agency Trial Balance December 31, 2005 Unadjusted Accumulated Depreciation Accounts Payable Unearned Advertising Revenue Salaries Payable Adjusted Dr. Cr. Dr. Cr. $11,000 $11,000 20,000 21,500 8,400 60,000 5,000 60,000 $28,000 $35,000 5,000 7,000 5,000 5,600 ---0- Common Stock 10,000 1,300 10,000 Retained Earnings 4,800 4,800 Advertising Revenue 58,600 61,500 Salaries Expense 10,000 11,300 Depreciation Expense 7,000 Art Supplies Expense 3,400 Rent Expense 4,000 4,000 $113,400 $113,400 $123,200 $123,200