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 $180,000 of cleaning services on account. 2. Collected $135,000 cash from accounts receivable. 3. Paid salaries of $40,000 for the year. 4. Adjusted the accounts to reflect management's expectations that uncollectible accounts expense would be $1,800. 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 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 0 0 Req A Req B2 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 0 $ 0 Total assets Liabilities Stockholders' Equity 0 Total stockholders' equity Total liabilities and stockholders' equity $ 0 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 $ 0 Net cash flow from operating activities Cash flows from investing activities Cash flows from financing activities Net change in cash 0 Ending cash balance $ 0 ( Req B2 Req B3