Weygandt, Accounting Principles1 - 19846

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Weygandt, Accounting Principles1 (*****Also All Calculation Work Submitted in Other Word Files for understanding*****)



Fernetti Advertising Agency was founded by John Fernetti in January of 2011. Presented below are both the adjusted and unadjusted trial balances as of December 31, 2012.

FERNETTI ADVERTISING AGENCY

Trial Balance

December 31, 2012

 

Unadjusted

 

Adjusted

 

Dr.

 

Cr.

 

Dr.

 

Cr.

Cash

$11,000

     

$11,000

   

Accounts Receivable

20,000

     

22,500

   

Art supplies

8,600

     

5,000

   

Prepaid insurance

3,350

     

2,500

   

Printing equipment

60,000

     

60,000

   

Accumulated depreciation

   

$28,000

     

$34,000

Accounts payable

   

5,000

     

5,000

Interest payable

   

–0–

     

150

Notes payable

   

5,000

     

5,000

Unearned Advertising Fees

   

7,200

     

5,600

Salaries payable

   

–0–

     

1,300

J. Fernetti, Capital

   

25,500

     

25,500

J. Fernetti, Drawing

12,000

     

12,000

   

Advertising revenue

   

58,600

     

62,700

Salaries expense

10,000

     

11,300

   

Insurance expense

       

850

   

Interest expense

350

     

500

   

Depreciation expense

       

6,000

   

Art supplies expense

       

3,600

   

Rent expense

4,000

     

4,000

   
 

$129,300

 

$129,300

 

$139,250

 

$139,250

Instructions

(b) Complete the income statement and a statement of owner\'s equity for the year ending December 31, 2012, and a balance sheet at December 31. (List multiple entries from largest to smallest e.g. 10, 5, 3, 2. For the balance sheet, list assets in order of liquidity and liabilities from largest to smallest e.g. 10, 5, 3, 2, with notes payable then accounts payable first.)

 

1.    If the note has been outstanding 6 months, what is the annual interest rate on that note?

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