On December 31, the Philips Company noted the following transactions that occurred during 2002, some or all of which might require adjustment to the books.

(a) Payment to suppliers of \($2,900\) was made for purchases on account during the year and was not recorded.

(b) Building and land were purchased on Januan- 2 for \($175.000.\) The building's fair market value was S 120.000 at the time of purchase. The building is being depreciated over a 20-year life using the straight-line method, assuming no salvage value.

(c) Of the \($34,000\) in Accounts Receivable, 2.5% is estimated to be uncollectible.
Currently. Allowance for Doubtful Accounts shows a debit balance of \($460\).

(d) On August 1 . \($40.000\) was loaned to a customer on a 6-month note with interest at an annual rate of 12%.

(e) During 2002. Philips received S8,500 in advance for services. 80% of which will be performed in 2003. The SB. 500 was credited to sales revenue.

(f) The interest expense account was debited for all interest charges incurred during the year and shows a balance of \($1.100.\) However, of this amount. \($600\) represents a discount on a 60-day note payable, due January 30, 2003.
Instructions:
1. Give the necessary- adjusting entries to bring the books up to date.
2. Indicate the net change in income as a result of the foregoing adjustments.