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 $220,000 of cleaning services on account. 2. Collected $165,000 cash from accounts receivable. 3. Paid salaries of $34,000 for the year. 4. Adjusted the accounts to reflect management's expectations that uncollectible accounts expense would be $2,000. 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. 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. Not all cells will require entry.) HOLMES CLEANING SERVICE Horizontal Statements Model Balance Sheet Event Year 1 1. 2. 3. Bal. 4. Assets Equity Cash + NRV Accounts Receivable Retained Earnings Accounts Titles for Retained Earnings +++++ 0+ 0= 0 Reg A Req B1> 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 < Req A 0 $ 0 Req B2 > Prepare a balance sheet for Year 1. HOLMES CLEANING SERVICE Balance Sheet As of December 31, Year 1 Assets Total assets Liabilities Stockholders' Equity Total stockholders' equity Total liabilities and stockholders' equity 0 $ 0 0 $ 0 Req B1 Req 83 > Prepare a statement of cash flows for Year 1. (Cash outflows 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 Net cash flow from operating activities Cash flows from investing activities Cash flows from financing activities Net change in cash Ending cash balance < Req B2 $ 0 0 0 Req 83