Reference no: EM131197157

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?