The unadjusted and adjusted trial balances of the Queen Street Advertising Agency as at November 30, 2014, follow:

Instructions
(a) Prepare the adjusting entries that were made.
(b) Prepare an income statement and a statement of owner's equity for the year ended November 30, 2014, and a balance sheet at November 30, 2014.
(c) Calculate the annual interest rate on the note. The note payable has been outstanding for eight months. Interest is paid on a monthly basis at the beginning of each month.
(d) Determine the balance in Salaries Payable on November 30, 2013. The company paid $15,250 in salaries in 2014.
TAKING IT FURTHER A friend of yours is considering purchasing the company from Sally Dufferin and asks you to comment on the company's results of operations and its financial position. Is the company performing well or not? Does the financial position appear healthy or weak? Use specific information from the financial statements to support your answer.

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QUEEN STREET ADVERTISING AGENCY Trial Balance November 30, 2014 Unadjusted Adjusted Debit Credit Debit Credit Accounts payable Accounts receivable S 4,200 $ 4,800 13,650 $14,750 depreciation-equipment 28,500 34,000 9,000 5,500 9,000 66,000 875 Depreciation expense Equipment Insurance expense Interest expense Interest payable Note payable Prepaid insurance Rent expense S. Dufferin, capital S. Dufferin, drawings Salaries expense Salaries payable Service revenue Supplies Supplies expense Unearned revenue 1,600 1,000 125 30,000 30,000 2,400 7,150 7,750 17,800 17,800 27,200 12,875 27,200 14,350 1,475 60,750 58,750 1,265 5,935 7,200 7,100 $146,350 $146,350 $155,150 $155,150