Holmes Cleaning 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 $84,000 of cleaning services on account.
2. Collected $76,000 cash from accounts receivable.
3. Paid salaries of $28,500 for the year.
4. Adjusted the accounts to reflect management’s expectations that uncollectible accounts expense would be $1,650. The expense was determined using the percent of revenue method.

Required
a. Organize the transaction data in accounts under an accounting equation.
b. Prepare an income statement, a balance sheet, and a statement of cash flows for Year 1.