Mason Advertising was founded in January 2013. Presented below are adjusted and unadjusted trial balances as of December 31, 2020.

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, 2020, and an unclassified balance sheet at December 31.

c. Answer the following questions.

1. If the note has been outstanding 3 months, what is the annual interest rate on that note?

2. If the company paid $12,500 in salaries and wages in 2020, what was the balance in Salaries and Wages Payable on December 31, 2019?

Transcribed Image Text:

Mason Advertising Trial Balance December 31, 2020 Unadjusted Adjusted Cr. Dr. Dr. Cr. $ 11,000 $ 11,000 Cash Accounts Receivable 20,000 23,500 Supplies Prepaid Insurance Equipment Accumulated Depreciation-Equipment Accounts Payable Interest Payable Notes Payable 8,400 3,000 3,350 2,500 60,000 60,000 $ 28,000 $ 33,000 5,000 5,000 -0- 150 5,000 5,000 Unearned Service Revenue 7,000 5,600 1,300 Salaries and Wages Payable -0- Common Stock 10,000 10,000 Retained Earnings 3,500 3,500 Service Revenue 58,600 63,500 Salaries and Wages Expense Insurance Expense Interest Expense Depreciation Expense Supplies Expense Rent Expense 10,000 11,300 850 350 500 5,000 5,400 4,000 4,000 $117,100 $117,100 $127,050 $127,050