Vedula Advertising Agency was founded by Murali Vedula in January 2009. Presented on the next page are both the adjusted and unadjusted trial balances as of December 31, 2014.

Instructions
(a) Journalize the annual adjusting entries that were made.
(b) Prepare an income statement and a retained earnings statement for the year ended December 31, and a classified balance sheet at December 31.
(c) Identify which accounts should be closed on December 31.
(d) If the note has been outstanding 10 months, what is the annual interest rate on that note?
(e) If the company paid $10,500 in salaries and wages in 2014, what was the balance in Salaries and Wages Payable on December 31, 2013?

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VEDULA ADVERTISING AGENCY TRIAL BALANCE DECEMBER 31, 2014 Unadjusted Adjusted Dr. Dr. $ 11,000 16,000 9,400 3,350 60,000 Cr. Cr. $ 11,000 19,500 Cash Accounts Receivable Supplies Prepaid Insurance Equipment Accumulated Depreciation-Equipment Notes Payable Accounts Payable Interest Payable Unearned Service Revenue 6,500 1,790 60,000 $ 25,000 $ 30,000 8,000 2,000 8,000 2,000 560 5,000 3,100 Salaries and Wages Payable 820 Common Stock 20,000 5,500 20,000 Retained Earnings 5,500 Dividends 10,000 10,000 Service Revenue 57,600 63,000 Salaries and Wages Expense Insurance Expense Interest Expense Depreciation Expense Supplies Expense Rent Expense 9,000 9,820 1,560 560 5,000 2,900 4,350 4,350 $123,100 $123,100 $132,980 $132,980