1.Milea Inc. experienced the following events in Year 1.

a.Received $100,000 cash from the issue of common stock.

b.Performed services on account for $56,000.

c.Paid the utility expense of $2,500

d.Collected $48,000 of the accounts receivable.

e.Received $15,000 as a deposit for services to be performed in Year 2.

f.During the year paid $30,000 of salaries

g.Recorded $10,000 of accrued salaries at the end of the year to be paid at the beginning of the next year.

h.On July 1^st paid $12,000 for a one-year insurance policy.

i.Performed services for cash for $15,000.

j.Borrowed $10,000 on July 1^st at an interest rate of 6% for one year.Be sure to accrue interest expense as of 12/31.The loan and all interest will be paid on June 30^th.

k.Bought $2,000 of supplies during the year on account.

l.Bought equipment on January 1^st for $25,000 paying $10,000 in cash and signing a note payable for the remaining balance.The note is for 2 years at an interest rate of 10%.Interest for this year is paid on December 31^st.

m.Paid a $2,000 cash dividend to the stockholders.

Adjustments:

1)An inventory of supplies at the end of the year determined that only $400 of supplies remained

2)Accrue interest on the note for 6 months

3)Recognize that 6 months of the insurance policy has

expired.

4)Record depreciation expense assuming that the equipment has a useful life of 10 years.

5)Accrue and pay interest on the $15,000 note.

a.Cash 100,000

C/S100,000

b.A/R56,000

Service Revenue56,000

c.Utility expense$2,500

Cash2,500

d.Cash $48,000

A/R48,000

e.Cash$15,000

Unearned Revenue15,000

f.Salaries expense$30,000

Cash30,000

g.Salaries expense$10,000

Wages payable10,000

h.Prepaid Insurance$12,000

Cash12,000

i.Cash15,000

Service Revenue15,000

j.Cash$10,000

Note Payable$10,000

k.Supplies2,000

A/P2,000

l.Equipment$25,000

Cash10,000

N/P15,000

m.R/E2,000

Cash2,000

Adjustments:

1)Supplies expense1,600

Supplies1,600

2)Accrued interest$300

Interest Payable300

3)Insurance expense6,000

Prepaid insurance6,000

4)Depreciation expense2,500

Accumulated depreciation2,500

5)Interest expense1,500

Cash1,500

Determine the balances at the end of the first year in:

Cash

A/R

Equipment

Less:Accumulated Depreciation

Equipment (net)

Unearned Revenue

Earned Revenue

Net Income

Total Liabilities

Retained Earnings