Santo Design was founded by Thomas Grant in January 2011. Presented below is the adjusted trial balance as of December 31, 2020. Santo DesignAdjusted Trial BalanceDecember 31, 2020      Dr.    Cr. Cash $  11,350   Accounts Receivable 21,500   Supplies 5,000   Prepaid Insurance 2,500   Equipment 60,000   Accumulated Depreciation—Equipment   $  35,000 Accounts Payable   5,000 Interest Payable   150 Notes Payable   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 11,300   Insurance Expense 850   Interest Expense 150   Depreciation Expense 7,000   Supplies Expense 3,400   Rent Expense    4,000 000,000   $127,050 $127,050 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?

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Santo Design was founded by Thomas Grant in January 2011. Presented below is the adjusted trial balance as of December 31, 2020.

Santo Design
Adjusted Trial Balance
December 31, 2020
     Dr.    Cr.
Cash $  11,350  
Accounts Receivable 21,500  
Supplies 5,000  
Prepaid Insurance 2,500  
Equipment 60,000  
Accumulated Depreciation—Equipment   $  35,000
Accounts Payable   5,000
Interest Payable   150
Notes Payable   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 11,300  
Insurance Expense 850  
Interest Expense 150  
Depreciation Expense 7,000  
Supplies Expense 3,400  
Rent Expense    4,000 000,000
  $127,050 $127,050

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?

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