Other information:

Employees are paid every Friday for the five$-$day week ended on that day. Salaries amount to

$$4,000$ per week. The accounting periods ends on a Monday.

A note for $$10,000$ was received from a customer on April $1,2019.$ The note matures in one

year and bears $8\%$ interest.

An insurance premium of $$12,500$ was paid on March $1,2019,$ and was charged to Prepaid

Insurance. The premium covers a $24-$month period beginning March $1,2019.$

Fees received in advance from clients and included in Service Revenue initially, $$25,000.$

Equipment is being depreciated at $10\%$ per year.

A physical count of the supplies on hand at the end of December $31,2019,$ is $$37,600.$

Rent of the building is $$4,500$ per month. The rent for $2019$ has been paid, as has that for

January, February, and March $2020.$ The total rental payment was initially recorded in Rent

Expense.

Bad debt expense for the year is $5\%$ of the accounts receivable.

Instructions

Prepare an income statement for $2019$ and a classified balance sheet. $(35$ Points$)$