(Adjusting Entries and Financial Statements) Presented below are the trial balance and the other information related to Yorkis Perez, a consulting engineer.
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YORKIS PEREZ, CONSULTING ENGINEER |
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Debit |
Credit |
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Cash |
$29,500 |
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Accounts Receivable |
49,600 |
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Allowance for Doubtful Accounts |
$750 |
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Inventory |
1,960 |
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Prepaid Insurance |
1,100 |
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Equipment |
25,000 |
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Accumulated Depreciation—Equipment |
6,250 |
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Notes Payable |
7,200 |
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Owner’s Capital |
35,010 |
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Service Revenue |
100,000 |
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Rent Expense |
9,750 |
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Salaries and Wages Expense |
30,500 |
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Utilities Expenses |
1,080 |
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Office Expense |
720 |
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$149,210 |
$149,210 |
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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, 2012.
7. Rent of the building is $750 per month. The rent for 2012 has been paid, as has that for January 2013.
8. Office salaries and wages earned but unpaid December 31, 2012, $2,510.
Instructions
(a) From the trial balance and other information given, prepare annual adjusting entries as of December 31, 2012. (Omit explanations.)
(b) Prepare an income statement for 2012, a statement of owner’s equity, and a classified balance sheet. Yorkis Perez withdrew $17,000 cash for personal use during the year.