AbDulla Advertising Agency was founded by Miriam AbDulla in January 2009. Presented here are both the adjusted and unadjusted trial balances as of December 31, 2014.

ABDULLA ADVERTISING AGENCY Trial Balance December 31, 2014 Unadjusted Adjusted Dr. Cr. Dr. Cr.

Cash $ 11,000 $ 11,000 Accounts Receivable 16,000 19,000 Supplies 9,400 7,000 Prepaid Insurance 3,350 1,790 Equipment 60,000 60,000 Accumulated Depreciation—

Equipment $ 25,000 $ 30,000 Notes Payable 8,000 8,000 Accounts Payable 2,000 2,000 Interest Payable 0 560 Unearned Service Revenue 5,000 3,100 Salaries and Wages Payable 0 820 Common Stock 20,000 20,000 Retained Earnings 5,500 5,500 Dividends 10,000 10,000 Service Revenue 57,600 62,500 Salaries and Wages Expense 9,000 9,820 Insurance Expense 1,560 Interest Expense 560 Depreciation Expense 5,000 Supplies Expense 2,400 Rent Expense 4,350 4,350

$123,100 $123,100 $132,480 $132,480 Instructions

(a) Journalize the annual adjusting entries that were made.

(b) Prepare an income statement and a retained earnings statement for the year ended December 31, and a classified balance sheet at December 31.

(c) Identify which accounts should be closed on December 31.

(d) If the note has been outstanding 10 months, what is the annual interest rate on that note?

(e) If the company paid $10,000 in salaries in 2014, what was the balance in Salaries and Wages Payable on December 31, 2013?AppendixLO1