Hector Companys December 31, Year 1 balance sheet showed $900 cash, $600 supplies, $500 accounts payable, $400 common stock, and $600 retained earnings. The company experienced the following events during year 2.

(1)	Purchased $1,200 of supplies on account.
(2)	Earned $1,800 cash revenue.
(3)	Paid $1,100 cash to reduce accounts payable created in Event 1 above.
(4)	Physical count revealed $200 of supplies on hand at the end of Year 2.

Based on this information, the company would report

-All of the answers are correct.

-a $600 balance in the accounts payable account on the Year 2 balance sheet.

-a $700 net cash inflow from operating activities on the Year 2 statement of cash flows.

-a $1,600 supplies expense on the Year 2 income statement.

Part two:

Brown Companys December 31, Year 1 balance sheet showed $1,800 cash, $200 accounts payable, $600 common stock, and $1,000 retained earnings. The company experienced the following events during year 2.

(1)	On April 1, Year 2 the company paid $1,800 cash to rent office space for the coming year starting immediately.
(2)	Earned $1,700 cash revenue.
(3)	Paid a $300 cash dividend.

Based on this information, the company would report

-$1,350 balance in a prepaid rent account on the Year 2 balance sheet.

-All of the answers are correct.

-a $1,050 balance in retained earnings on the Year 2 balance sheet.

-a $1,700 net cash outflow from operating activities on the Year 2 statement of cash flows.