1) During Sokka Corporation's second year of operations, the company purchased $850 of supplies. The company began year two with $150 of supplies on hand. At the end of the second year, the company had remaining supplies on hand of $100, available for use in the third year. How does the related adjusting entry at the end of year two affect Sokka's financial statements? a) Expenses will increase by $800 on the income statement. Assets and Retained Earnings will decrease by $800 on the Balance Sheet. b) Expenses will decrease by $900 on the income statement. 2) At the end of year one, Katara Unlimited received cash of $1,500. The customer paid the amount in advance to cover 15 months of services from Katara (\$100 per month). The amount covers services from January of year two through(March of year three. What impact will this cash receipt have on the income statement in year three? a) Katara will recognize $1,500 in revenue in year three. 1/1/Yr33/31/Vr3 b) Katara will not recognize any revenue in year three. c) Katara will recognize $750 in revenue in year three. d) Katara will recognize $300 in revenue in year three. 3) All of the following events will cause net income on the accrual basis to differ from cash provided by operating activities except: accinal=cash a) Performing services for a customer who paid in advance last year. b) Paying for 24 months of rent in advance. CD Paying for advertising expenses for commercials that aired this year. df Using office supplies that werepurchased last year