1. John runs a small retail marketing business as a limited liability company that is taxed as a sole proprietorship. His business currently applies the cash method of accounting. After 10 years in the business, the company has grown to a point where John believes he should switch to the accrual method of accounting. Currently, he has $21,000 in accounts payable that were incurred in the prior year but were not deductible because no payment was made on them. Also, the business has $12,000 in accounts receivable that were not reported in income last year, because he operated the business on a cash basis.

Under the four-year method of accounting change, how much is the amount adjustment that John must make to his income each year?