Exercise 3-12 Waterway Design was founded by Thomas Grant in January 2011. Presented below is the adjusted trial balance as of December 31, 2017. WATERWAY DESIGN ADJUSTED TRIAL BALANCE DECEMBER 31, 2017 Debit Credit Cash $12,255 Accounts Receivable 22,755 Supplies 6,255 Prepaid Insurance 3,755 Equipment 61,255 Accumulated Depreciation-Equipment $36,255 Accounts Payable 6,255 Interest Payable 162 Notes Payable 5,400 Unearned Service Revenue 6,855 Salaries and Wages Payable 1,568 Common Stock 11,255 Retained Earnings 4,755 Service Revenue 62,755 Salaries and Wages Expense 12,555 Insurance Expense 1,118 Interest Expense 162 Depreciation Expense 7,400 Supplies Expenses 3,400 Rent Expense 4,350 $135,260 $135,260 Prepare an income statement for the year ending December 31, 2017. (Enter loss using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) WATERWAY DESIGN Income Statement $ $ $ SHOW LIST OF ACCOUNTS Prepare a statement of retained earnings for the year ending December 31, 2017. (List items that increase retained earnings first.) WATERWAY DESIGN Statement of Retained Earnings $ : $ SHOW LIST OF ACCOUNTS Prepare an unclassified balance sheet at December 31. (List assets in order of liquidity.) WATERWAY DESIGN Balance Sheet Assets $ $ : $ Liabilities and Stockholders' Equity $ $ $ SHOW LIST OF ACCOUNTS Answer the following questions. (Round interest rate to 0 decimal places, e.g. 5%.) (1) If the note has been outstanding 6 months, what is the annual interest rate on that note? (Hint: Assume that the amount of interest payable in the trial balance relates to the note payable in the trial balance.) The annual interest rate % (2) If the company paid $17,500 in salaries and wages in 2017, what was the balance in Salaries and Wages Payable on December 31, 2016? The balance in Salaries and Wages Payable $