Problem 38 Flint Advertising was founded by Murali Vedula in

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

Solution

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