3. (15 points) (Adjusting Entries and Financial Statements) 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 Debit Credit Cash $ 44,500 Accounts Receivable 49,600 Allowance For Doubtful Accounts $ 750 Inventory 1,960 Prepaid Insurance 1,100 Prepaid Rent 3,750 Equipment 25,000 Accumulated Depreciation Equipment 6,250 Unearned Revenue 15,000 Notes Payable 7,200 Owner's Capital 35,010 Service Revenue 103,750 Rent Expense 9,750 Salaries and Wages Expense 30,500 Utilities Expenses 1,080 Office Expense 720 $167,960 $167,960 Note: none of the below adjustments/transactions have been recorded. They are NOT reflected in the above trial balance. You'll need to add some accounts as you record the adjustments/transactions below: 1. Provided $8,000 of the services related to the unearned revenue reflected in the trial balance. Record the adjustment. 2. Services performed for clients that were not recorded by December 31, $11,000. Record the accrued revenue. 3. Bad debt expense for the year is $2,130. Record bad debt expense. 4. Insurance expired during the year $800. Record the adjustment. 5. Equipment has a 10 year useful life and no salvage value. Record depreciation expense using the straight-line method. 6. The company took out a loan from the bank (this transaction was already recorded). It was a 90-day, 9% note for $7,200 taken out on December 1, 2014. Record the accrued interest expense for the month of December. 7. Rent on the administrative offices building is $750 per month. The company paid for 5 month's rent on December 1, 2014 (this entry was already recorded). Record the used portion of prepaid rent at December 31, 2014. 8. Office salaries and wages earned but unpaid December 31, 2014, $2,510. Record accrued salaries and wages. 9. The owner of the company withdrew $4,000 cash for personal use. Instructions (a) From the trial balance and other information given, prepare adjusting/journal entries as of December 31, 2014 (items 1-9 above). Accounts Debits Credits (b) Prepare an income statement for 2014, a statement of owner's equity, and a classified balance sheet. The statements should reflect all the adjustments recorded above