Mason Advertising was founded in January 2013. Presented below are adjusted and unadjusted trial balances

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Mason Advertising was founded in January 2013. Presented below are adjusted and unadjusted trial balances as of December 31, 2020.
             
  MASON ADVERTISING
  Trial Balance 
  December 31, 2020
      Unadjusted Adjusted
      DR CR DR CR
   Cash      $  11,000    $   11,000  
   Accounts Receivable        20,000         23,500  
   Supplies          8,400           3,000  
   Prepaid Insurance          3,350           2,500  
   Equipment        60,000         60,000  
   Accumulated Depreciation—Equipment      $    28,000    $   33,000
   Accounts Payable             5,000           5,000
   Interest Payable                  -                150
   Notes Payable             5,000           5,000
   Unearned Service Revenue             7,000           5,600
   Salaries and Wages Payable                  -             1,300
   Common Stock           10,000         10,000
   Retained Earnings             3,500           3,500
   Service Revenue           58,600         63,500
   Salaries and Wages Expense       10,000         11,300  
   Insurance Expense                 850  
   Interest Expense            350              500  
   Depreciation Expense              5,000  
   Supplies Expense              5,400  
   Rent Expense         4,000           4,000  
       $117,100  $  117,100  $ 127,050  $ 127,050
             
Instructions        
(a) Journalize the annual adjusting entries that were made. (Omit explanations.)  
             
 Dec           Debit   Credit 
 31            
             
             
   
 31            
             
             
   
 31            
             
             
   
 31            
             
             
   
 31            
             
             
             
 31            
             
             
             
 31            
             
             
             
(b) Prepare an income statement and a statement of retained earnings for the year ending December 31, 2020, and an unclassified balance sheet at December 31.
 
             
  Mason Advertising    
  Income Statement    
  For the Year Ended December 31, 2020    
  Revenues        
           
  Expenses        
             
             
             
             
             
             
             
             
             
  Mason Advertising    
  Statement of Retained Earnings    
  For the Year Ended December 31, 2020    
             
             
             
             
  Mason Advertising  
  Balance Sheet  
  December 31, 2020  
  Assets  
             
             
             
             
             
             
             
             
  Liabilities and Stockholders’ Equity  
             
             
             
             
             
             
             
             
             
             
             
             
(c) Answer the following questions.        
  (1) If the note has been outstanding 3 months, what is the annual interest rate on that note?
   
             
             
             
             
             
             
  (2) If the company paid $12,500 in salaries and wages in 2020, what was the balance in Salaries and Wages Payable on December 31, 2019?
   
             
             
             
             
             
             
             
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