Colton Enterprises experienced the following events for Year 1, the first year of operation:

THIS IS FOR YEAR 1 NOT YEAR 2 OR 3

Acquired $42,000 cash from the issue of common stock.

Paid $12,700 cash in advance for rent. The payment was for the period April 1, Year 1, to March 31, Year 2.

Performed services for customers on account for $86,000.

Incurred operating expenses on account of $38,500.

Collected $66,000 cash from accounts receivable.

Paid $28,000 cash for salaries expense.

Paid $30,800 cash as a partial payment on accounts payable.

Adjusting Entries

Made the adjusting entry for the expired rent. (See Event 2.)

Recorded $3,800 of accrued salaries at the end of Year 1.

Events for Year 2

Paid $3,800 cash for the salaries accrued at the end of the prior accounting period.

Performed services for cash of $35,000.

Purchased $3,500 of supplies on account.

Paid $12,600 cash in advance for rent. The payment was for one year beginning April 1, Year 2.

Performed services for customers on account for $102,000.

Incurred operating expenses on account of $48,500.

Collected $96,000 cash from accounts receivable.

Paid $46,000 cash as a partial payment on accounts payable.

Paid $32,200 cash for salaries expense.

Paid a $10,000 cash dividend to stockholders.

Adjusting Entries

Made the adjusting entry for the expired rent. (Hint: Part of the rent was paid in Year 1.)

Recorded supplies expense. A physical count showed that $800 of supplies were still on hand.

Required

a. Record the events and adjusting entries for Year 1 in general journal form. b. Post the Year 1 events to T-accounts. (You will also post the closing entries in Req E to these T-accounts.) c. Prepare a trial balance for Year 1. d-1. Prepare an income statement for Year 1. d-2. Prepare a statement of changes in stockholders equity for Year 1. d-3. Prepare a balance sheet for Year 1. d-4. Prepare a statement of cash flows for Year 1. e. Record the entries to close the Year 1 temporary accounts to Retained Earnings in the general journal and post to the T-accounts. f. Prepare a post-closing trial balance for December 31, Year 1.