P$2\mathrm{.}6($LO $3,4)($Adjusting Entries and Financial Statements$)$ The following are the trial balance and the other information related to Perez Consulting Engineers.

Fees received in advance from clients $$6,000,$ which were recorded as revenue.

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

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

Insurance expired during the year $$480.$

Equipment is being depreciated at $10\%$ per year.

Perez gave the bank a $90-$day, $10\%$ note for $$7,200$ on December $1,2025.$

Rent of the building is $$750$ per month. The rent for $2025$ has been paid, as has that for January $2026,$ and recorded as Rent Expense.

Office salaries and wages earned but unpaid December $31,2025,$ $$2,510.$

Instructions

a$.$ From the trial balance and other information given, prepare annual adjusting entries as of December $31,2025.($Omit explanations.$)$

b$.$ 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$).$

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P$2\mathrm{.}6($LO $3,4)($Adjusting Entries and Financial Statements$)$ The following are the trial balance and the other information related to Perez Consulting Engineers.

Fees received in advance from clients $$6,000,$ which were recorded as revenue.

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

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

Insurance expired during the year $$480.$

Equipment is being depreciated at $10\%$ per year.