Sandy’s Accounting Service began operation on January 1, Year 1. The company experienced the following events for its first year of operations:

Events Affecting Year 1:

1. Provided $96,000 of accounting services on account.

2. Collected $80,000 cash from accounts receivable.

3. Paid salaries of $32,000 for the year.

4. Adjusted the accounts to reflect management’s expectations that uncollectible accounts expense would be $1,600.

Required

a. Organize the transaction data in accounts under an accounting equation.

b. Prepare an income statement, balance sheet, and statement of cash flows for Year 1.