Problem 3¬6 - YORKIS PEREZ, CONSULTING ENGINEER

Problem 3­6  - YORKIS PEREZ, CONSULTING ENGINEER

Presented below are the trial balance and the other information related to Yorkis Perez, a consulting engineer.

YORKIS PEREZ, CONSULTING ENGINEER

TRIAL BALANCE

DECEMBER 31, 2014

                                                                                Debit                                     Credit

Cash                                                                      $30,220

Accounts Receivable                                      57,490

Allowance for Doubtful Accounts                                                             $670

Inventory                                                            1,710

Prepaid Insurance                                           1,240

Equipment                                                          33,300

Accumulated Depreciation ­Equipment                                                   6,280

Notes Payable                                                                                                   7,200

Owner’s Capital                                                                                                37,800

Service Revenue                                                                                              115,130

Rent Expense (13 months of rent)           8,710

Salaries and Wages Expense                       32,140

Utilities Expenses                                            1,510

Office Expense                                                    760

Totals                                                                    $167,080                              $167,080

1. Fees received in advance from clients $7,060.

2. Services performed for clients that were not recorded by December 31, $5,070.

3. Bad debt expense for the year is $1,880.

4. Insurance expired during the year $420.

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

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

7. Rent of the building is $670 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, $2,810.

Yorkis Perez withdrew $16,790 cash for personal use during the year.

1.       From the trial balance and other information given, prepare annual adjusting entries as of December 31, 2014

2.       Prepare an income statement for 2014

3.       Prepare a classified balance sheet for 2014