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 $$140,000$ of cleaning services on account.

Collected $$105,000$ cash from accounts receivable.

Paid salaries of $$32,000$ for the year.

Adjusted the accounts to reflect management's expectations that uncollectible accounts expense would be $$1,600.$ 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.

Req A

Req B$2$

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

Assets

Equity

Cash

NRV

$=$

Retained

Accounts Titles for Retained

Earnings