Problem 3-8 Flint Advertising was founded by Murali Vedula in January 2015. Pres

Question

Problem 3-8 Flint Advertising was founded by Murali Vedula in January 2015. Presented below are both the adjusted and unadjusted trial balances as of December 31, 2017 FLINT ADVERTISING TRIAL BALANCE DECEMBER 31, 2017 Unadjusted Dr. Adjusted Cr. Dr. $12,670 19,986 6,723 2,706 64,700 Cr. Cash Accounts Receivable Supplies Prepaid Insurance Equipment Accumulated Depreciation-Equipment Notes Payable Accounts Payable Interest Payable Unearned Service Revenue Salarles and Wages Payable Common Stock Retained Eamings Dividends Service Revenue Salaries and Wages Expense Insurance Expense Interest Expense Depreclation Expense Supplies Expense Rent Expense 16,540 64,700 $27,100 7,700 1,850 $32,290 7,700 1,850 5,460 3,741 19,940 12,910 19,940 12,910 10,600 10,600 59,710 64,875 10,468 1,704 9,680 5,190 3,167 6,180 6,180 134,670 $134,670 $144,633 $144,633

Explanation / Answer

Balance Sheet :

Accounts should be closed at Dec 31 :

Dividend A/c

Services Revenue A/c

Salary and wages expense

Insurance Expense

Interest expense

Depreciation expense

supplies expense

rent expense

If the interest charged on the Note Payable is for 10 months, then the rate of interest is :

Interest / principle * due period / 12 * 100

= (539 / 7700) * (10/12) * 100 = 8.40%

if the company paid $10040 in salaries adn wages in 2017= Salaries and wages payable = Salaries and wages expenses - paid = 10468 - 10040 = $428

Assets: Amount $ CAsh 12670 AR 19986 Supplies 6723 Prepaid Insurance 2706 Current Assets= 42085 Equipment 64700 Acc Dep - Equipment (32290) Total Assets= $74495 Liabilities and Capital : Amount $ NP 7700 AP 1850 Interest payable 539 Salary & Wages payable 788 Current Liabilities 10877 CS RE : 12910 + Net Income +37627 - Dividend paid -10600   39937 Total Liabilities and Capital $74495

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