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: Provided $170,000 of cleaning services on account. Collected $127,500 cash from accounts receivable. Paid salaries of $30,000 for the year. Adjusted the accounts to reflect managements expectations that uncollectible accounts expense would be $2,100. The expense was determined using the percent of revenue method. b. Post the general journal entries to T-accounts.

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 $170,000 of cleaning services on account.
2. Collected $127,500 cash from accounts receivable.
3. Paid salaries of $30,000 for the year.
4. Adjusted the accounts to reflect managements expectations that uncollectible accounts expense would be $2,100. The expense was determined using the percent of revenue method.

c. Prepare an income statement, balance sheet, and statement of cash flows for Year 1. (Statement of Cash Flows and Balance Sheet only: Items to be deducted must be indicated with a minus sign.)