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 $160,000 of cleaning services on account.
2. Collected $120,000 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 $2,200. 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.

Organize the transaction data in accounts under an accounting equation. (Enter any decreases to account balances with a minus sign. If there is no effect on the Accounts Titles for Retained Earnings, leave the cell blank.)

HOLMES CLEANING SERVICE
Horizontal Statements Model
Event	Balance Sheet							Accounts Titles for Retained Earnings
	Assets					=	Equity
	Cash	+	Accounts Receivable		Allowance		Retained Earnings
2018
1.		+				=
2.		+				=
3.		+				=
4.		+				=
Bal.		+				=

Prepare an income statement for 2018

HOLMES CLEANING SERVICE
Income Statement
For the Year Ended December 31, 2018
Operating expenses
Total operating expenses

Prepare a balance sheet for 2018.

HOLMES CLEANING SERVICE
Balance Sheet
As of December 31, 2018
Assets
Total assets
Liabilities
Stockholders' Equity
Total stockholders' equity
Total liabilities and stockholders' equity

Prepare a statement of cash flows for 2018. (Amounts to be deducted should be indicated with a minus sign.)

HOLMES CLEANING SERVICE
Statement of Cash Flows
For the Year Ended December 31, 2018
Cash flows from operating activities
Net cash flow from operating activities
Cash flows from investing activities
Cash flows from financing activities
Net change in cash
Ending cash balance