On December 31, Wright Company noted the following transactions that occurred during 2008, some or all of which might require adjustment to the books.

(a) Payment of $3,100 to suppliers was made for purchases on account during the year and was not recorded.

(b) Building and land were purchased on January 2 for $210,000.The building’s fair market value was $150,000 at the time of purchase. The building is being depreciated over a 30-year life using the straight-line method, assuming no salvage value.

(c) Of the $40,000 in Accounts Receivable, 5% is estimated to be uncollectible. Currently, Allowance for Bad Debts shows a debit balance of $350.

(d) On August 1, $60,000 was loaned to a customer on a 12-month note with interest at an annual rate of 12%.

(e) During 2008, Wright received $12,500 in advance for services, 80% of which will be performed in 2009.The $12,500 was credited to sales revenue.

(f) The interest expense account was debited for all interest charges incurred during the year and shows a balance of $1,400. However, of this amount, $500 represents a discount on a 60-day note payable, due January 30, 2009.

Instructions:

1. Give the necessary adjusting entries to bring the books up to date.

2. Indicate the net change in income as a result of the foregoing adjustments.