Holmes Cleaning Service began operation on January 1, 2018. The company experienced the following events for its first year of operations:

Events Affecting 2018:

1. Provided $120,000 of cleaning services on account.
2. Collected $90,000 cash from accounts receivable.
3. Paid salaries of $32,000 for the year.
4. Adjusted the accounts to reflect managements expectations that uncollectible accounts expense would be $1,400. The expense was determined using the percent of revenue method.

Required

1. Organize the transaction data in accounts under an accounting equation.
2. Prepare an income statement, a balance sheet, and a statement of cash flows for 2018.

Req A Req B1 Req B2 Reg B3 Organize the transaction data in accounts under an accounting equation. (Enter any decreases to account balana sign. If there is no effect on the Accounts Titles for Retained Earnings, leave the cell blank.) HOLMES CLEANING SERVICE Horizontal Statements Model Balance Sheet Assets Event Equity Accounts Titles for Retained Earnings Cash Accounts Receivable Allowance Retained Earnings 2018 1. 2. 3. 3 4. Bal. 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 B1 Req B2 Req B3 Prepare a balance sheet for Year 1. S HOLMES CLEANING SERVICE Balance Sheet As of December 31, Year 1 Assets 0 Total assets $ 0 . Liabilities Stockholders' Equity 0 Total stockholders' equity Total liabilities and stockholders' equity $ 0 Req A Req B1 Reg 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 Ending cash balance