The December 31, 2017, balance sheet of Tybee Corporation is provided below (in millions).

Transactions during January 2018:

• Paid $5 for employee salaries and wages.
• Collected $10 cash from customers for work previously performed and billed.
• Purchased equipment for $5 cash.
• Purchased $2 of supplies for cash.
• Paid $3 to a vendor for supplies previously purchased on credit in December 2017.
• Paid the interest owed as of December 31, 2017.
• Completed $18 in services for customers, receiving 50 percent payment in cash and billing the remainder.
• Paid $15 to reduce outstanding notes payable.
• Collected $5 for the issuance of common shares.

As of 1/31/18:

• Had performed 25 percent of the services for which it had been paid in advance.
• Owes $1 for interest that will be paid next month.
• Depreciated equipment in the amount of $4.
• Physical count of supplies reveals $3 on hand.
• Declared and paid a cash dividend in the amount of 50 percent of January€™s net income.

REQUIRED:
a. Prepare the journal entries to record transactions and to adjust and close accounts.
b. Prepare a complete set of financial statements as of January 31, 2018, and prepare the statement of cash flows under the direct and the indirect (Appendix 4A) methods.

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Liabilities and Shareholders' Equity Assets $ 4 $ 24 Accounts payable Cash Accounts receivable Interest payable 15 Supplies Unearned revenue 12 Notes payable Prepaid insurance 12 54 $ 50 Common stock Equipment 20 Retained earnings Less: Accumulated depreciation (12) 12 Net equipment 38 Land 10 $105 $105 Total Total