Gifford Company experienced the following accounting events during Year 1: Started operations on January 1 when it acquired $33,000 cash by issuing common stock. Earned $33,600 of revenue on account. On March 1 collected $51,600 cash as an advance for services to be performed in the future. Paid cash operating expenses of $30,000. Paid a $4,000 cash dividend to stockholders. On December 31, Year 1, adjusted the books to recognize the revenue earned by providing services related to the advance described in Event 3. The contract required Gifford to provide services for a one-year period starting March 1. Collected $28,000 cash from accounts receivable.

Gifford Company experienced the following accounting events during Year 2: Recognized $53,600 of cash revenue. On April 1, paid $13,560 cash for an insurance policy that provides coverage for one year beginning immediately. Collected $3,300 cash from accounts receivable. Paid cash operating expenses of $34,000. Paid a $6,300 cash dividend to stockholders. On December 31, Year 2, adjusted the books to recognize the remaining revenue earned by providing services related to the advance described in Event 3 of Year 1. On December 31, Year 2, Gifford adjusted the books to recognize the amount of the insurance policy used during Year 2.