Alcorn Service Company was formed on January 1, Year 1. Events Affecting the Year 1 Accounting Period 1. Acquired $62,000 cash from the issue of common stock. 2. Purchased $1,600 of supplies on account. 3. Purchased land that cost $22,000 cash. 4. Paid $1,600 cash to settle accounts payable created in Event 2. 5. Recognized revenue on account of $46,000. 6. Paid $23,000 cash for other operating expenses. 7. Collected $40,000 cash from accounts receivable. Information for Year 1 Adjusting Entries 8. Recognized accrued salaries of $3,400 on December 31, Year 1. 9. Had $400 of supplies on hand at the end of the accounting period. Events Affecting the Year 2 Accounting Period 1. Acquired $22,000 cash from the issue of common stock. 2. Paid $3,400 cash to settle the salaries payable obligation. 3. Paid $4,200 cash in advance to lease office space. 4. Sold the land that cost $22,000 for $22,000 cash. 5. Received $5,400 cash in advance for services to be performed in the future. 6. Purchased $1,200 of supplies on account during the year. 7. Provided services on account of $34,000. 8. Collected $35,000 cash from accounts receivable. 9. Paid a cash dividend of $7,000 to the stockholders. 10. Paid other operating expenses of $21,500. Information for Year 2 Adjusting Entries 11. The advance payment for rental of the office space (see Event 3) was made on March 1 for a 12 Tharoch advance for canciraethonravidlar in the future we collarted on October 1 lemn Information for Year 2 Adjusting Entries 11. The advance payment for rental of the office space (see Event 3) was made on March 1 for a one-year term. 12. The cash advance for services to be provided in the future was collected on October 1 (see Event 5). The one-year contract started on October 1. 13. Had $500 of supplies remaining on hand at the end of the period. 14. Recognized accrued salaries of $4,100 at the end of the accounting period. 15. Recognized $600 of accrued interest revenue. b-1. Prepare an income statement for Year 1 and Year 2. b-2. Prepare the statement of changes in stockholders' equity for Year 1 and Year 2. b-3. Prepare the balance sheet for Year 1 and Year 2. b-4. Prepare the statement of cash flows for Year 1 and Year 2, using the vertical statements model. Req B1 Req B2 Req B3 Req B4 Prepare an income statement for Year 1 and Year 2. (Do not round Interme ALCORN SERVICE COMPANY Income Statements For the Years Ended December 31, Year 1 and Year 2 Year 1 Year 2 Service revenue Interest revenue 0 0 Total revenue Expenses Operating expenses Salaries expense Supplies expense Rent expense 0 Total expenses Net income 0 0 $ 0 $ Req B1 Req B2 Req B3 Req B4 Prepare the statement of changes in stockholders' equity for Year 1 ALCORN SERVICE COMPANY Statement of Changes in Stockholders' Equity For the Years Ended December 31, Year 1 and Year 2 Year 1 Year 2 Beginning common stock 0 0 Ending common stock Beginning retained earnings 0 0 Ending retained earnings Total stockholders' equity $ 0 $ 0
