The following are the trial balance and the other information related to Bruce Harms, who operates a construction hauling business.

Instructions
Fees received in advance from clients $5,000.
Services performed for clients that were not recorded by December 31, $4,900.
Equipment is being depreciated at 8% per year.
The bad debt expense for the year is $1,430.
Insurance expired during the year $480.
Harms gave the bank a 90-day, 5% note for $7,200 on December 1, 2022.
The rent of the building is $750 per month. The rent for all of 2022, and for January of 2023 has been paid.
Office salaries and wages earned but unpaid December 31, 2022, $1,510.

Instructions
1. From the trial balance and other information given, prepare annual adjusting entries as of December 31, 2022. (Omit explanations.)
2. Prepare an income statement for 2022, a statement of owner's equity, and a classified statement of financial position. Harms withdrew $12,000 cash for personal use during the year.

Credit 2,750 HARMS HAULERS Trial Balance December 31, 2022 Debit Cash $ 39,500 Accounts Receivable 50,600 Allowance for Doubtful Accounts $ Supplies 2,960 Prepaid Insurance 1,100 Equipment 27,000 Accumulated Depreciation Equipment Notes Payable Owner's Capital Service Revenue Rent Expense 9,750 Salaries and Wages Expense 30,500 Utilities Expenses 1,080 Office Expense 720 $163.210 6,250 7,200 45,010 102,000 $163,210