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)

Cash dr. $29,500

Accounts Receivable dr. $49,600

Allowance for Doubtful Accounts cr. $750

Inventory dr. $1,960

Prepaid Insurance dr. $1,100

Equipment dr. $25,000

Accumulated Depreciation - Equipment cr. $6,250

Notes Payable cr. $7,200

Owner's Capital cr. $35,010

Service Revenue cr. $100,000

Rent Expense dr. $9,750

Salaries and Wages Expense dr. $30,500

Utilities Expenses dr. $1,080

Office Expense dr. $720

Given information

1. Fees received in advance from clients $6,000

2. Services performed for clients that were not recorded by December 31, $4,900

3. Bad debt expense for the year is $1,430

4. Insurance expired during the year $480

5. Equipment is being depreciated at 10% per year.

6. Yorkis Perez gave the bank a 90-day, 10% note for $7,200 on December 1, 2014

7. Rent of the building is $750 per month. The rent for 2014 has been paid, as has that for January 2015.

8. Office salaries and wages earned but unpaid December 31, 2014, $2,510

Instructions

(a) From the trial balance and other information given, prepare annual adjusting entries as of December 31, 2014

(b) Prepare an income statement for 2014, a statement of owner's equity, and a classified balance sheet. Yorkis Perez withdrew $17,000 cash for personal use during the year.