Exercise 7-2A (Algo) Accounting for uncollectible accounts: allowance method LO 7-1

Holmes Cleaning Service began operation on January 1, Year 1. The company experienced the following events for its first year of operations: Events Affecting Year 1:

1. Provided $200,000 of cleaning services on account.
2. Collected $150,000 cash from accounts receivable.
3. Paid salaries of $26,000 for the year.
4. Adjusted the accounts to reflect managements expectations that uncollectible accounts expense would be $1,500. The expense was determined using the percent of revenue method.

Required a. Organize the transaction data in accounts under an accounting equation. b. Prepare an income statement, a balance sheet, and a statement of cash flows for Year 1. Complete this question by entering your answers in the tabs below. Req A Req B1 Req B2 Req B3 Organize the transaction data in accounts under an accounting equation. (Enter any decreases to account balances with a minus sign. Not all cells require input.) Balance Sheet Liabilities Equity Event Account Titles for Retained Earnings Assets NRV + Accounts Receivable + Cash Retained Earnings Year 1 1. + 2. + 3. + + + + + = 4. = + + + Bal. Required a. Organize the transaction data in accounts under an accounting equation. b. Prepare an income statement, a balance sheet, and a statement of cash flows for Year 1. Complete this question by entering your answers in the tabs below. Req A Req B1 Req B2 Req B3 Prepare an income statement for Year 1. HOLMES CLEANING SERVICE Income Statement For the Year Ended December 31, Year 1 Operating expenses Total operating expenses Required a. Organize the transaction data in accounts under an accounting equation. b. Prepare an income statement, a balance sheet, and a statement of cash flows for Year 1. Complete this question by entering your answers in the tabs below. Req A Req B1 Req B2 Req B3 Prepare a balance sheet for Year 1. HOLMES CLEANING SERVICE Balance Sheet As of December 31, Year 1 Assets Total assets Liabilities Stockholders' Equity Total stockholders' equity Total liabilities and stockholders' equity Required a. Organize the transaction data in accounts under an accounting equation. b. Prepare an income statement, a balance sheet, and a statement of cash flows for Year 1. Complete this question by entering your answers in the tabs below. Req A Req B1 Req B2 Req B3 Prepare a statement of cash flows for Year 1. (Amounts to be deducted should be indicated with a minus sign.) HOLMES CLEANING SERVICE Statement of Cash Flows For the Year Ended December 31, Year 1 Cash flows from operating activities Net cash flow from operating activities Cash flows from investing activities Cash flows from financing activities Net change in cash Ending cash balance