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

Perez Consulting Engineers Trial Balance December 31, 2025
		Debit		Credit
Cash		$ 29,500
Accounts Receivable		55,300
Allowance for Doubtful Accounts				$ 748
Supplies		2,390
Prepaid Insurance		1,130
Equipment		31,700
Accumulated DepreciationEquipment				7,925
Notes Payable				7,200
Common Stock				10,000
Retained Earnings				21,563
Service Revenue				117,118
Rent Expense		9,724
Salaries and Wages Expense		32,240
Utilities Expenses		1,920
Office Expense		650
		$164,554		$164,554

1. Fees received in advance from clients $6,150, which were recorded as revenue.
2. Services performed for clients that were not recorded by December 31, $5,368.
3. Bad debt expense for the year is $1,416.
4. Insurance expired during the year $518.
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, 2025.
7. Rent of the building is $748 per month. The rent for 2025 has been paid, as has that for January 2026, and recorded as Rent Expense.
8. Office salaries and wages earned but unpaid December 31, 2025, $2,510.

Instructions

1. From the trial balance and other information given, prepare annual adjusting entries as of December 31, 2025. (Omit explanations.)
2. Prepare an income statement for 2025, a retained earnings statement, and a classified balance sheet. Perez paid a $17,000 cash dividend during the year (recorded in Retained Earnings).