Alcorn Service Company was formed on January 1 , Year 1. Events Affecting the Year 1 Accounting Period 1. Acquired $64,000 cash from the issue of common stock. 2. Purchased $2,000 of supplies on account. 3. Purchased land that cost $26,000 cash. 4. Paid $2,000 cash to settle accounts payable created in Event 2. 5. Recognized revenue on account of $50,000. 6. Paid $25,000 cash for other operating expenses. 7. Collected $42,000 cash from accounts receivable. Information for Year 1 Adjusting Entries 8. Recognized accrued salaries of $3,600 on December 31 , Year 1 . 9. Had $600 of supplies on hand at the end of the accounting period. Events Affecting the Year 2 Accounting Period 1. Acquired $24,000 cash from the issue of common stock. 2. Paid $3.600 cash to settle the salaries payable obligation. 3. Paid $4,800 cash in advance to lease office space. 4. Sold the land that cost $26,000 for $26,000 cash. 5. Recelved $6,000 cash in advance for services to be performed in the future. 6. Purchased $1,400 of supplies on account during the year. 7. Provided services on account of $36,000. 8. Collected $37,000 cash from accounts receivable. 9. Paid a cash dividend of $9.000 to the stockholders. 10. Paid other operating expenses of $23,500. 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 $700 of supplies remaining on hand at the end of the period. 14. Recognized accrued salaries of $4,300 at the end of the accounting period. a. Identify each event affecting the Year 1 and 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 account headings of the accounting equation. b. Prepare an income statement, statement of changes in stockholders' equity, balance sheet, and statement of cash flows for Year 1 and Year 2 ALCORN SERVICE COMPANY Accounting Equation for Year 1 ALCORN SERVICE COMPANY Accounting Equation for Year 2 ALCORN SERVICE COMPANY Income Statements For the Years Ended December 31, 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 \begin{tabular}{|l|l|l|} \hline Beginning common stock & Year 1 & \\ \hline Ending common stock & & \\ \hline Beginning retained earnings & & \\ \hline & & \\ \hline & & \\ \hline Ending retained earnings & & \\ \hline Total stockholders' equity & & \\ \hline \end{tabular} ALCORN SERVICE COMPANY Balance Sheets As of December 31, Year 1 and Year 2 Total assets Liabilities ALCORN SERVICE COMPANY Statements of Cash Flows For the Years Ended December 31, Year 1 and Year 2 \begin{tabular}{|} \hline \\ \hline \\ \hline Cash flows from operating activities \\ \hline Cash flow from operating activities \\ \hline \end{tabular} Cash flows from investing acivities Net cash flow from operating activities Cash flows from investing acivities \begin{tabular}{|l|l|l|} \hline & \\ \hline Net cash flow from investing activities & & \\ \hline Cash flows from financing activities & & \\ \hline & & \\ \hline Net cash flow from financing activities & & \\ \hline Net change in cash & & \\ \hline Ending cash balance & & \\ \hline \end{tabular}