Question
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
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 $84,000 of cleaning services on account.
Collected $76,000 cash from accounts receivable.
Paid salaries of $28,500 for the year.
Adjusted the accounts to reflect managements expectations that uncollectible accounts expense would be $1,650. The expense was determined using the percent of revenue method.
Required
Organize the transaction data in accounts under an accounting equation.
Prepare an income statement, a balance sheet, and a statement of cash flows for Year 1.
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