Question

Santo Design was founded by Thomas Grant in January 2011. Presented below is the adjusted trial balance as of December 31, 2020. 

Answer 1

1	SANTO DESIGN
	Income statement
	For the Year Ended December 31,2020
	Revenues
	Sales	$       61,500
	Total Revenues
	Expenses
	Depreciation expense	$         7,000
	Salaries and Wage expense	$       11,300
	Insurance expense	$            850
	Interest	$            150
	Supplies	$         3,400
	Rent expense	$         4,000
	Total expense	-$      26,700
	Net Income		$ 34,800
2	Retained earnings
	Beginning balance
	Retained earnings on1 jan	$         3,500
	Add net income for FY	$       34,800
	Retained earnings balance 31 Dec	$       38,300
3	SANTO DESIGN
	BALANCE SHEET AS ON 31 dec. 2020
	ASSETS
	Current assets:
	Cash and cash equivalent	$       11,350
	Accounts receivables	$       21,500
	Supplies	$         5,000
	Prepaid insurance	$         2,500
	Total current assets	$       40,350
	Equipment, net (60000-35000)	$       25,000
	Total assets	$       65,350
	LIABILITIES AND STOCKHOLDER EQUITY
	Current liabilities:
	Accounts payable	$         5,000
	Interest payable	$            150
	Notes payable	$         5,000
	Unearned service revenue	$         5,600
	Salaries and wages payable	$         1,300
	Total current liabilities	$       17,050
	stockholders equity
	common stock	$       10,000
	Retained earnings	$       38,300
	Total stockholder's equity	$       48,300
	Total liabilities and stockholders equity	$       65,350
4	Interest rate on note payable, the note is outstanding for 6months only
	interst payable	150
	note payable	5000
	interst rate	3%
	Annual interest rate	6%
5	salaries and wages in dec.2019
	salaries and wages paid in 2020	17500
	salaries payable in 2020	1300
	salaries and wage in 2020	11300
	salaries and wages paid relating to 2020	10000
	salaries and wages outstanding for 2019	7500
	17500-10000