Answer:
Swifty Design
1. Income Statement for the year ended December 31, 2020:
Service Revenue $61,710
Salaries and Wages Expense 11,510
Insurance Expense 966
Interest Expense 518
Depreciation Expense 7,600
Supplies Expenses 3,400
Rent Expense 4,000 $27,994
Net income $33,716
b) Statement of Retained Earnings for the year ended December 31, 2020:
Retained Earnings, January 1, 2020 $3,710
Net income 33,716
Retained Earnings, December 31, 2020 $37,426
c) Balance Sheet as of December 31, 2020:
Assets
Current assets:
Cash $11,210
Accounts Receivable 21,710
Supplies 5,210
Prepaid Insurance 2,710
Total current assets $40,840
Long-term assets:
Equipment 60,210
Accumulated depreciation 35,210 $25,000
Total assets $65,840
Liabilities + Equity:
Liabilities:
Accounts Payable $5,210
Interest Payable 168
Notes Payable 5,600
Unearned Service Revenue 5,810
Salaries and Wages Payable 1,416
Total liabilities $18,204
Equity:
Common Stock $10,210
Retained Earnings 37,426 $47,636
Total liabilities + equity $65,840
2. The annual interest would be $518 according to accrual basis of accounting.
3. If the company paid $17,500 in salaries and wages in 2014 (2020), the balance in Salaries and Wages Payable on December 31, 2013(2019) was $7,406.
Step-by-step explanation:
SWIFTY DESIGN
ADJUSTED TRIAL BALANCE
DECEMBER 31, 2020
Debit Credit
Cash $11,210
Accounts Receivable 21,710
Supplies 5,210
Prepaid Insurance 2,710
Equipment 60,210
Accumulated Depreciation-Equipment $35,210
Accounts Payable 5,210
Interest Payable 168
Notes Payable 5,600
Unearned Service Revenue 5,810
Salaries and Wages Payable 1,416
Common Stock 10,210
Retained Earnings 3,710
Service Revenue 61,710
Salaries and Wages Expense 11,510
Insurance Expense 966
Interest Expense 518
Depreciation Expense 7,600
Supplies Expenses 3,400
Rent Expense 4,000
Totals $129,044 $129,044
Salaries and Wages:
Wages payable, 12/31/2019 $7,406
Salaries expense 11,510
Cash paid in 2020 17,500
Wages Payable, 12/31/2020 $1,416