Colton Enterprises experienced the following events for Year 1, the first year of operation: 1. Acquired $54,000 cash from the issue of common stock. 2. Paid $13,900 cash in advance for rent. The payment was for the period April 1, Year 1, to March 31, Year 2. 3. Performed services for customers on account for $110,000. 4. Incurred operating expenses on account of $44,500. 5. Collected $84,000 cash from accounts receivable. 6. Paid $40,000 cash for salary expense. 7. Paid $35,600 cash as a partial payment on accounts payable. Adjusting Entries 8. Made the adjusting entry for the expired rent. (See Event 2.) 9. Recorded $6,200 of accrued salaries at the end of Year 1. Events for Year 2 1. Paid $6,200 cash for the salaries accrued at the end of the prior accounting period. 2. Performed services for cash of $59,000. 3. Purchased $4,700 of supplies on account. 4. Paid $16,200 cash in advance for rent. The payment was for one year beginning April 1, Year 2. 5. Performed services for customers on account for $126,000. 6. Incurred operating expenses on account of $60,500. 7. Collected $108,000 cash from accounts receivable. 8. Paid $58,000 cash as a partial payment on accounts payable. 9. Paid $33,400 cash for salary expense. 10. Paid a $10,000 cash dividend to stockholders. Adjusting Entries 11. Made the adjusting entry for the expired rent. (Hint. Part of the rent was paid in Year 1.) 12. Recorded supplies expense. A physical count showed that $400 of supplies were still on hand. b. Post the Year 1 events to T-accounts. Cash Accounts Receivable Beg Bal. Beg. Bal. End. Bal. End. Bal. Prepaid Rent Accounts Payable Beg. Bal. Beg. Bal. End. Bal. End. Bal. Salaries Payable Common Stock Beg. Bal. Beg. Bal. End. Bal. End. Bal. Service Revenue Operating Expenses Beg. Bal. Beg. Bal. End. Bal. End. Bal. Rent Expense Salaries Expense Beg. Bal. Beg. Bal. End. Bal. End. Bal. c. Prepare a trial balance for Year 1. COLTON ENTERPRISES Trial Balance December 31, Year 1 Account Titles Debit Credit Totals d-1. Prepare an income statement for Year 1. COLTON ENTERPRISES Income Statement For the Year Ended December 31, Year 1 Expenses .................................. Total expenses d-2. Prepare a statement of changes in stockholders' equity for Year 1. COLTON ENTERPRISES Statement of Changes in Stockholders' Equity For the Year Ended December 31, Year 1 Total stockholders' equity d-3. Prepare a balance sheet for Year 1. COLTON ENTERPRISES Balance Sheet As of December 31, Year 1 Assets Total assets Liabilities Total liabilities Stockholders' equity Total stockholders' equity Total liabilities and stockholders' equity