P3-7 (LO3, 4) (Adjusting Entries and Financial Statements) Sorenstam Advertising AG was founded in January 2018. The following are the adjusted and unadjusted trial balances as of December 31, 2022. Sorenstam Advertising AG Trial Balance December 31, 2022 Unadjusted Adjusted Dr. Cr. Dr. Cr. Cash 7,000 7,000 Accounts Receivable 19,000 20,000 Supplies 8,500 3,500 Prepaid Insurance 3,250 2,500 Equipment 60,000 60,000 Accumulated Depreciation-Equipment 27,000 35,750 Accounts Payable 5,000 5,000 Interest Payable 150 Notes Payable 5,000 5,000 Unearned Service Revenue 7,000 5,600 Unearned Service Revenue 7,000 5,600 Salaries and Wages Payable 1,500 Share Capital-Ordinary 10,000 10,000 Retained Earnings 4,500 4,500 Service Revenue 58,600 61,000 Salaries and Wages Expense 10,000 11,500 Insurance Expense 750 Interest Expense 350 500 Depreciation Expense 8,750 Supplies Expense 5,000 10,000 Rent Expense 4,000 4,000 117,100 117,100 128,500 128,500 Instructions a. Journalize the annual adjusting entries that were made. (Omit explanations.) 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, 2022. c. Answer the following questions. 1. If the useful life of equipment is 6 years, what is the expected residual value? 2. If the note has been outstanding 3 months, what is the annual interest rate on that note? Instructions a. Journalize the annual adjusting entries that were made. (Omit explanations.) 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, 2022. c. Answer the following questions. 1. If the useful life of equipment is 6 years, what is the expected residual value? 2. If the note has been outstanding 3 months, what is the annual interest rate on that note? 3. If the company paid 12,500 in salaries and wages in 2022, what was the balance in Salaries and Wages Payable on December 31, 2021