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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

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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 $190,000 of cleaning services on account. 2. Collected $142,500 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 $1,500. 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. Complete this question by entering your answers in the tabs below. Reg A Reg B1 Req B2 Reg B3 HOLMES CLEANING SERVICE Horizontal Statements Model Balance Sheet Assets Equity Accounts Titles for Retained NRV Retained Earnings Accounts Receivable Earnings Event Cash Year 1 1. + 3 2. 3. 4. ++ 11111111 + Bal. 0+ ( ReqA Req B1 > Req A Req B1 Req B2 Reg B3 Prepare an income statement for Year 1. HOLMES CLEANING SERVICE Income Statement For the Year Ended December 31, Year 1 Service revenue Operating expenses Salaries expense $ 34,000 Uncollectible accounts expense 1,500 $ 190,000 Total operating expenses Net income 35,500 $ 154,500 Req A Reg B1 Req B2 Reg B3 Prepare a balance sheet for Year 1. HOLMES CLEANING SERVICE Balance Sheet As of December 31, Year 1 Assets 0 $ 0 Total assets Liabilities Stockholders' Equity 0 Total stockholders' equity Total liabilities and stockholders' equity $ 0 Req A Req B1 Req B2 Reg B3 Prepare a statement of cash flows for Year 1. (Cash outflows should be indicated 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 0 Ending cash balance $ 0

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