The following are the trial balance and the other information related to Perez Consulting Engineers.

1. Fees received in advance from clients $6,000, which were recorded as revenue.

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. Perez gave the bank a 90-day, 10% note for $7,200 on December 1, 2020.

7. Rent of the building is $750 per month. The rent for 2020 has been paid, as has that for January 2021, and recorded as Rent Expense.

8. Office salaries and wages earned but unpaid December 31, 2020, $2,510. Instructions

a. From the trial balance and other information given, prepare annual adjusting entries as of December 31, 2020. (Omit explanations.)

b. Prepare an income statement for 2020, a retained earnings statement, and a classified balance sheet. Perez paid a $17,000 cash dividend during the year (recorded in Retained Earnings).

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Perez Consulting Engineers Trial Balance December 31, 2020 Debit Credit $ 29,500 Cash Accounts Receivable 49,600 Allowance for Doubtful Accounts 750 Supplies Prepaid Insurance Equipment Accumulated Depreciation-Equipment Notes Payable 1,960 1,100 25,000 6,250 7,200 Common Stock 10,000 Retained Earnings 25,010 Service Revenue 100,000 Rent Expense Salaries and Wages Expense Utilities Expenses Office Expense 9,750 30,500 1,080 720 $149,210 $149,210