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 $190,000 of cleaning services on account. 2. Collected $142,500 cash from accounts receivable. 3. Paid salaries of $44,000 for the year. 4. Adjusted the accounts to reflect management's 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. Organize the transaction data in accounts under an accounting equation. Note: Enter any decreases to account balances with a minus sign. Not all cells require input. Prepare an income statement for Year 1. Prepare a balance sheet for Year 1 . Prepare a statement of cash flows for Year 1. Note: Amounts to be deducted should be indicated with a minus sign