If the company paid $12,590 in salaries in 2014, what was the balance in salaries and wages payable on Dec 31, 2013? The balance in Salaries and Wages Payable on December 31, 2013

Problem 3-3A Costello Advertising Agency Inc. was founded by Pat Costello in January of 2013. Presented below are both the adjusted and unadjusted trial balances as of December 31, 2014. COSTELLO ADVERTISING AGENCY, INC. Trial Balance December 31, 2014 Unadjusted Dr. Cash Adjusted Cr. Dr. $ 11,541 20,870 22,131 Supplies 8,525 5,005 Prepaid Insurance 3,481 2,341 75,192 Cr. $ 11,541 75,192 Accounts Receivable Equipment Accumulated DepreciationEquipment $ 27,925 $ 34,191 4,972 4,972 0 168 Notes Payable 4,200 4,200 Unearned Service Revenue 7,150 5,897 Accounts Payable Interest Payable Salaries and Wages Payable 0 1,238 Common Stock 18,783 18,783 Retained Earnings 24,813 24,813 Dividends 12,119 Service Revenue Salaries and Wages Expense 12,119 58,800 10,232 11,470 Insurance Expense Interest Expense 1,140 333 501 Depreciation Expense 6,266 Supplies Expense Rent Expense 61,314 3,520 4,350 $146,643 4,350 $146,643 $155,576 $155,576 Your answer is correct. Journalize the annual adjusting entries that were made. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Dec. 31 Accounts Receivable Debi Credi t t 126 1 Service Revenue 1261 (To record accrued revenue.) 125 3 Dec. 31 Unearned Service Revenue Service Revenue 1253 (To record unearned service revenue.) 352 0 Dec. 31 Supplies Expense Supplies 3520 (To record supplies used.) 626 6 Dec. 31 Depreciation Expense Accumulated DepreciationEquipment 6266 (To record depreciation.) Dec. 31 Interest Expense 168 Interest Payable 168 (To record interest.) 114 0 Dec. 31 Insurance Expense Prepaid Insurance 1140 (To record insurance.) 123 8 Dec. 31 Salaries and Wages Expense Salaries and Wages Payable 1238 (To record accrued salaries.) Your answer is correct. Prepare an income statement for the year ending December 31, 2014. COSTELLA ADVERTISING AGENCY, INC. Income Statement For the Year Ended December 31, 2014 Revenues $ 6131 4 Service Revenue Expenses Salaries and Wages Expense $ 1147 0 Depreciation Expense 6266 Rent Expense 4350 Supplies Expense 3520 Insurance Expense 1140 Interest Expense 501 Total Expenses 27247 Net Income / (Loss) $ 3406 7 Your answer is correct. Prepare a retained earnings statement for the year ending December 31, 2014. (List items that increase retained earnings first.) COSTELLA ADVERTISING AGENCY, INC. Retained Earnings Statement For the Year Ended December 31, 2014 Retained Earnings, January 1 Add : Net Income / (Loss) $ 2481 3 34067 58880 Less : Dividends 12119 Retained Earnings, December 31 $ 4676 1 Your answer is correct. Prepare a balance sheet at December 31. (List assets in order of liquidity.) COSTELLA ADVERTISING AGENCY Balance Sheet December 31, 2014 Assets Cash $ 1154 1 Accounts Receivable 22131 Supplies 5005 Prepaid Insurance 2341 Equipment $ 7519 2 Less : Accumulated Depreciation-Equipment 34191 41001 $ 8201 9 Total Assets Liabilities and Stockholders' Equity Liabilities Notes Payable $ 4200 Accounts Payable 4972 Unearned Service Revenue 5897 Salaries and Wages Payable 1238 Interest Payable 168 Total Liabilities 16475 Stockholders' Equity Common Stock $ 1878 3 Retained Earnings 46761 Total Stockholders' Equity 65544 Total Liabilities and Stockholders' Equity $ 8201 9 Your answer is partially correct. 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 $12,590 in salaries in 2014, what was the balance in Salaries and Wages Payable on December 31, 2013? Annual interest rate The balance in Salaries and Wages Payable on December 31, 2013 8 $ 1259 0 %