Delgado Advertising Agency was founded by Maria Delgado in January of 2013. Presented below are both… 1 answer below »
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Delgado Advertising Agency was founded by Maria Delgado in January of 2013. Presented below are both the adjusted and unadjusted trial balances as of December 31, 2014. DELGADO ADVERTISING AGENCY Trial Balance December 31, 2014
Cash
Accounts Receivable Supplies
Prepaid Insurance Equipment
Unadjusted
Adjusted
$ 11,000 20,000 8,600 3,350 60,000
$ 11,000 21,500 4,800 2,500 60,000
Accumulated Depreciation-Equipment
$ 28,000
$ 34,000
Accounts Payable
5,000
5,000
Interest Payable
-0-
150
Notes Payable
5,000
5,000
Unearned Service Revenue
7,200
5,900
Salaries and Wages Payable
-0-
2,100
Owner's Capital
25,500
25,500
Owner's Drawings
12,000
12,000
Service Revenue
58,600
61,400
Salaries and Wages Expense
10,000
12,100
Insurance Expense
850
Interest Expense
350
500
Depreciation Expense
6,000
Supplies Expense
3,800
Rent Expense
4,000
4,000
$129,300
$129,300
$139,050
$139,050
Instructions
(a) Journalize the annual adjusting entries that were made.
(b) Prepare an income statement and an owner's equity statement for the year ending December 31, 2014, and a balance sheet at December 31.
(c) Answer the following questions.
(1) If the note has been outstanding 6 months, what is the annual interest rate on that note?
(2) If the company paid $12,500 in salaries in 2014, what was the balance in Salaries and Wages Payable on December 31, 2013?