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 $120,000 of cleaning services on account. Collected $90,000 cash from accounts receivable. Paid salaries of $34,000 for the year. Adjusted the accounts to reflect managements expectations that uncollectible accounts expense would be $1,500. The expense was determined using the percent of revenue method