Alcorn Service Company was formed on January 1, Year 1. Events Affecting the Year 1 Accounting Period 1. Acquired $76,000 cash from the issue of common stock. 2. Purchased $4,400 of supplies on account. 3. Purchased land that cost $50,000 cash. 4. Paid $4,400 cash to settle accounts payable created in Event 2. 5. Recognized revenue on account of $74,000. 6. Paid $37,000 cash for other operating expenses. 7. Collected $54,000 cash from accounts receivable. Information for Year 1 Adjusting Entries 8. Recognized accrued salaries of $4,800 on December 31 , Year 1. 9. Had $1,800 of supplies on hand at the end of the accounting period. Events Affecting the Year 2 Accounting Period 1. Acquired $36,000 cash from the issue of common stock. 2. Paid $4,800 cash to settle the salaries payable obligation. 3. Paid $8,400 cash in advance to lease office space. 4. Sold the land that cost $50,000 for $50,000 cash. 5. Received $9,600 cash in advance for services to be performed in the future. 6. Purchased $2,600 of supplies on account during the year. 7. Provided services on account of $48,000. 8. Collected $49,000 cash from accounts receivable. 9. Paid a cash dividend of $8,000 to the stockholders. 0 . Paid other operating expenses of $35,500. 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 $1,900 of supplies remaining on hand at the end of the period. 14. Recognized accrued salaries of $5,500 at the end of the accounting period. 15. Recognized $2,000 of accrued interest revenue. ALCORN SERVICE COMPANY Accounting Equation for Year 2