The following are the trial balance and the other information related to Yorkis Perez, a consulting engineer.
Yorkis Perez, consulting engineer (trial balance December 31, 2014)
Cash dr. $29,500
Accounts Receivable dr. $49,600
Allowance for Doubtful Accounts cr. $750
Inventory dr. $1,960
Prepaid Insurance dr. $1,100
Equipment dr. $25,000
Accumulated Depreciation - Equipment cr. $6,250
Notes Payable cr. $7,200
Owner's Capital cr. $35,010
Service Revenue cr. $100,000
Rent Expense dr. $9,750
Salaries and Wages Expense dr. $30,500
Utilities Expenses dr. $1,080
Office Expense dr. $720
Given information
1. Fees received in advance from clients $6,000
2. Services performed for clients that were not recorded by December 31, $4,900
3. Bad debt expense for the year is $1,430
4. Insurance expired during the year $480
5. Equipment is being depreciated at 10% per year.
6. Yorkis Perez gave the bank a 90-day, 10% note for $7,200 on December 1, 2014
7. Rent of the building is $750 per month. The rent for 2014 has been paid, as has that for January 2015.
8. Office salaries and wages earned but unpaid December 31, 2014, $2,510
Instructions
(a) From the trial balance and other information given, prepare annual adjusting entries as of December 31, 2014
(b) Prepare an income statement for 2014, a statement of owner's equity, and a classified balance sheet. York is Perez withdrew $17,000 cash for personal use during the year.