AC 302 CHAPTER 3 PROBLEM QUESTION 2

AC 302 CHAPTER 3 PROBLEM QUESTION 2
Name					Date		
Instructor					Course		
Intermediate Accounting, 14th Edition by Kieso, Weygandt, and Warfield							
Primer on Using Excel in Accounting by Rex A Schildhouse							
							
"P3-2 (Adjusting Entries and Financial Statements) Mason Advertising Agency was founded in January
2008. Presented below are adjusted and unadjusted trial balances as of December 31, 2012."							
							
							
MASON ADVERTISING AGENCY							
Trial Balance							
December 31, 2012							
			Unadjusted		Adjusted		
			Debit	Credit	Debit	Credit	
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				0 		150 	
Notes Payable				5,000 		5,000 	
Unearned Service Revenue				7,000 		5,600 	
Salaries and Wages Payable				0 		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 		
Totals:			$117,100 	$117,100 	$127,050 	$127,050 	
							
Instructions:							
(a) Journalize the annual adjusting entries that were made. (Omit explanations.)							
Dec 31	Account Title				Amount		
	Account Title					Amount	
							
Dec 31	Account Title				Amount		
	Account Title					Amount	
							
Dec 31	Account Title				Amount		
	Account Title					Amount	
							
Dec 31	Account Title				Amount		
	Account Title					Amount	
							
Dec 31	Account Title				Amount		
	Account Title					Amount	
							
Dec 31	Account Title				Amount		
	Account Title					Amount	
							
Dec 31	Account Title				Amount		
	Account Title					Amount	
							
(b) Prepare an income statement and a statement of retained earnings for the year ending December 31, 2012, and an unclassified balance sheet at December 31.							
							
							
	MASON ADVERTISING AGENCY						
	Income Statement						
	For the Year Ended December 31, 2012						
	Revenues						
	Account Title					Amount	
	Expenses						
	Account Title				Amount		
	Account Title				Amount		
	Account Title				Amount		
	Account Title				Amount		
	Account Title				Amount		
	Account Title				Amount		
	Total expenses 					Formula	
	Net income 					Formula	
							
	MASON ADVERTISING AGENCY						
	Statement of Retained Earnings						
	For the Year Ended December 31, 2012						
	Retained Earnings, Jan 1					Amount	
	Add:	Title				Amount	
	Retained Earnings, Dec 31					Formula	
							
	MASON ADVERTISING AGENCY						
	Balance Sheet						
	December 31, 2012						
	Assets						
	Account Title					Amount	
	Account Title					Amount	
	Account Title					Amount	
	Account Title					Amount	
	Account Title				Amount		
	Account Title				Amount	Formula	
	Total Assets					Formula	
							
	Liabilities and Stockholders' Equity						
	Liabilities						
	Account Title				Amount		
	Account Title				Amount		
	Account Title				Amount		
	Account Title				Amount		
	Account Title				Amount		
	Total Liabilities					Formula	
							
	Stockholders' Equity						
	Account Title				Amount		
	Account Title				Amount	Formula	
	Total liabilities and stockholders' equity					Formula	
							
(c) Answer the following questions:							
(1) If the note has been outstanding			3	months, what is the annual interest rate on that note?			
							
Enter text answer here.							
							
							
							
							
  (2) If the company paid		$12,500 	in salaries and wages in 2012, what was the balance in Salaries and 				
       Wages Payable on December 31, 2011?							
							
Enter text answer here.