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    Mason Advertising Agency

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    Please see the attached file.
    Mason Advertising Agency was founded in January 2006. Presented below are both the adjusted and unadjusted trial balances as of December 31, 2010.

    MASON ADVERTISING AGENCY
    TRIAL BALANCE
    DECEMBER 31, 2010
    Unadjusted Adjusted
    Dr. Cr. Dr. Cr.

    Cash $ 11,000 $ 11,000

    Accounts Receivable 20,000 23,500

    Art Supplies 8,400 3,000

    Prepaid Insurance 3,350 2,500

    Printing Equipment 60,000 60,000

    Accumulated Depreciation $ 28,000 $ 33,000

    Accounts Payable 5,000 5,000

    Interest Payable -0- 150

    Notes Payable 5,000 5,000

    Unearned Advertising Revenue 7,000 5,600

    Salaries Payable -0- 1,300

    Common Stock 10,000 10,000

    Retained Earnings 3,500 3,500

    Advertising Revenue 58,600 63,500

    Salaries Expense 10,000 11,300

    Insurance Expense 850

    Interest Expense 350 500

    Depreciation Expense 5,000

    Art 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.
    (b) Prepare an income statement and a statement of retained earnings for the year ending December 31, 2010, and an unclassified balance sheet at December 31.
    (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 in 2010, what was the balance in Salaries Payable on
    December 31, 2009?

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    https://brainmass.com/business/the-adjusting-process/mason-advertising-agency-292844

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    The solution explains the adjusting entries and preparation of financial statements

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