Vedula Advertising Agency was founded by Murali Vedula in January 2007. Presented here are both the adjusted and unadjusted trial balances as of December 31, 2012.

VEDULA ADVERTISING AGENCY
Trial Balance
December 31, 2012

Unadjusted

Adjusted

Dr.

Cr.

Dr.

Cr.

Cash

$ 11,000

$ 11,000

Accounts Receivable

16,000

19,500

Supplies

9,400

6,500

Prepaid Insurance

3,350

1,790

Equipment

60,000

60,000

Accumulated Depreciation—

Equipment

$ 25,000

$ 30,000

Notes Payable

8,000

8,000

Accounts Payable

2,000

2,000

Interest Payable

0

560

Unearned Service Revenue

5,000

3,100

Salaries and Wages Payable

0

820

Common Stock

20,000

20,000

Retained Earnings

5,500

5,500

Dividends

10000

10000

Service Revenue

57600

63000

Salaries and Wages Expense

9000

9,820

Insurance Expense

1,560

Interest Expense

560

Depreciation Expense

5,000

Supplies Expense

2,900

Rent Expense

4350

4,350

$123,100

$123,100

$132,980

$132,980

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 in 2012, what was the balance in Salaries and Wages Payable on December 31, 2011?

"Get 15% discount on your first 3 orders with us"
Use the following coupon
"FIRST15"

Order Now