10:40 PM Fri Jan 31 My Messages E3.12 (LO 3, 4) (Prepare Financial Statements) Santo Design was founded by Thomas Grant in January 2011. Presented below is the adjusted trial balance as of December 31, 2020. 163 of 1583 Santo Design Adjusted Trial Balance December 31, 2020 Dr. Cr. Cash $ 11,350 Accounts Receivable 21,500 Supplies Prepaid Insurance Equipment Accumulated Depreciation-Equipment Accounts Payable Interest Payable Notes Payable 5,000 2,500 60,000 $ 35,000 5,000 150 5,000 Unearned Service Revenue 5,600 Salaries and Wages Payable 1,300 Common Stock 10,000 Retained Earnings 3,500 Service Revenue 61,500 Salaries and Wages Expense Insurance Expense 11,300 850 Interest Expense 150 Depreciation Expense Supplies Expense Rent Expense 7,000 3,400 4,000 $127,050 $127,050 3-60 CHAPTER 3 The Accounting Information System My Messages The Accounting Information System Instructions a. Prepare an income statement and a retained earnings statement for the year ending December 31, 2020, and an unclassified balance sheet at December 31. b. 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 $17,500 in salaries in 2020, what was the balance in Salaries and Wages Payable on December 31, 2019? E3.13 (LO 4, 5) (Closing Entries) The adjusted trial balance of Lopez Company shows the follow- ing data pertaining to sales at the end of its fiscal year, October 31, 2020: Sales Revenue $800,000, Delivery Expense $12,000, Sales Returns and Allowances $24,000, and Sales Discounts $15,000. Instructions a. Prepare the revenues section of the income statement. b. Prepare separate closing entries for (1) sales and (2) the contra accounts to sales. E3.14 (LO 4) (Closing Entries) the month of January 2020. Presented below is information related to Gonzales Corporation for $ 61,000 Salaries and wages expense $208,000 Cost of goods sold Delivery expense 8,000 Sales discounts 7,000 13,000 Sales returns and allowances 12,000 Insurance expense 350,000 Sales revenue 20,000 Rent expense Instructions Prepare the necessary closing entries. E3.15 (LO 5) (Missing Amounts) Presented below is financial information for two different companies. Eduardo Company Alatorre Company (d) $ 5,000 95,000 $90,000 Sales revenue (a) Sales returns and allowances 81,000 Net sales