Alcorn Service Company was formed on January 1, Year 1. Events Affecting the Year 1 Accounting Period 1. Acquired $78,000 cash from the issue of common stock. 2. Purchased $4.800 of supplies on account. 3. Purchased land that cost $54,000 cash. 4. Paid $4,800 cash to settle accounts payable created in Event 2. 5. Recognized revenue on account of $78,000. 6. Paid $39,000 cash for other operating expenses. 7. Collected $56,000 cash from accounts receivable. Information for Year 1 Adjusting Entries 8. Recognized accrued salaries of $5,000 on December 31, Year 1. 9. Had $2,000 of supplies on hand at the end of the accounting period. Events Affecting the Year 2 Accounting Period 1. Acquired $38,000 cash from the issue of common stock. 2. Paid $5,000 cash to settle the salaries payable obligation. 3. Paid $9,000 cash in advance to lease office space. 4. Sold the land that cost $54,000 for $54,000 cash. 5. Received $10,200 cash in advance for services to be performed in the future. 6. Purchased $2,800 of supplies on account during the year. 7. Provided services on account of $50,000. 8. Collected $51,000 cash from accounts receivable. 9. Paid a cash dividend of $4,000 to the stockholders. 10. Paid other operating expenses of $37,500. 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 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 $2,100 of supplies remaining on hand at the end of the period. 14. Recognized accrued salaries of $5,700 at the end of the accounting period. 15. Recognized $2,200 of accrued interest revenue. Acctg Equation Acctg Equation Year 1 Year 2 Identify each event affecting the Year 1 accounting periods as asset source (AS), asset use (AU), asset exchange (AE), or claims exchange (CE). Record the effects of each event under the appropriate general ledger account headings of the accounting equation. (Do not round intermediate calculations. Enter any decreases to account balances with a minus sign.) ALCORN SERVICE COMPANY Accounting Equation for Year 1 Assets Liabilities + Event Type of Event Supplies Prepaid Rent Land Accounts Cash Receivable 78,000 Accounts Payable Stockholders' Equity Common Retained Stock Earnings Salaries Payable Unearned Revenue + 1. AS 2. AS 4,800 3. AE 54,000 = (54,000) (4.800) 4. AU + 5. AS 78,000 6. AU (39,000) 56,000 7. AE (56,000) 8. CE 9. AU (2.800) 2,000 = 54,000 = Totals 36,200 22,000 0 0 0 0 + 0 0 Acctg Equation Acctg Equation Year 1 Year 2 Identify each event affecting the Year 2 accounting periods as asset source (AS), asset use (AU), asset exchange (AE), or claims exchange (CE). Record the effects of each event under the appropriate general ledger account headings of the accounting equation. (Do not round intermediate calculations. Enter any decreases to account balances with a minus sign.) ALCORN SERVICE COMPANY Accounting Equation for Year 2 Assets Prepaid Interest Supplies Land Rent Receivable Liabilities + Event Type of Event Accounts Receivable Cash Accounts Payable Salaries Payable Unearned Revenue Stockholders' Equity Common Retained Stock Earnings + Bal. + 1. AS 2. AU 38,000 (5,000) (9,000) 3. AE 9,000 + 4. AE (54,000) + 54,000 10,200 5. AS = + 6. AS 2,800 + 7. AS 50,000 51,000 + 8. AE = 51,000 (4,000) 9. AU + 10. AU 37,500 + 11. AU (7,500) + 12. CE 13. AU (2,700) + 14. CE = + AS 15. Totals 172,700 101,000 100 1,500 (54,000) 0 = 01 01 + 0 0 Complete this question by entering your answers in the tabs below. Req B1 Req B2 Req B3 Reg 14 Prepare an income statement for Year 1 and Year 2. (Do not round intermediate calculations.) ALCORN SERVICE COMPANY Income Statements For the Years Ended December 31, Year 1 and Year 2 Year 1 Year 2 Total revenue 0 0 Expenses Total expenses 0 0 S 0 $ 0 Prepare the statement of changes in stockholders' equity for Year 1 and Year 2. 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 Ending common stock Beginning retained earnings 0 Ending retained earnings Total stockholders' equity Oo $ $ 0 Prepare the balance sheet for Year 1 and Year 2. ALCORN SERVICE COMPANY Balance Sheets As of December 31, Year 1 and Year 2 Year 1 Year 2 Assets Total assets $ 0 $ 0 Liabilities 0 0 Total liabilities Stockholders' Equity 0 0 Total stockholders' equity Total liabilities and stockholders' equity $ 0 $ 0 Prepare the statement of cash flows for Year 1 and Year 2, using the vertical statements model. (Cash outflows should indicated with a minus sign.) ALCORN SERVICE COMPANY Statements of Cash Flows For the Years Ended December 31, Year 1 and Year 2 Year 1 Year 2 Cash flows from operating activities 0 0 Net cash flow from operating activities Cash flows from investing activities 0 Net cash flow from investing activities Cash flows from financing activities 0 0 Net cash flow from financing activities Net change in cash 0 0 Ending cash balance $ $ 0