LO 2-3, 2-4 Exercise 2-7B Effect of accrued expenses on the accounting equatiow and financial statements During Year I, Sur Corporation carned $5,000 of cash revenue and accrued $3,000 of salaries axpense. Required (Hint: Record the events in general ledger accounts under an accounting equation before satisfying the requirements) Based on this information alone: 1. Prepare the December 31, Year 1, balance sheet. Star Corporation Accounting Equation - Year 1 Event Assets - Liabilities Stockholders' Equity Salaries Common Retained Cash Payable Stock Earnings Earned Rev. Accrued Sal. Ending Bal. Star Corporation Balance Sheet b. Determine the amount of net income that Star would report on the Year I income statement. c. Determine the amount of net cash flow from operating activities that Star would report on the Year 1 statement of cash flows. d. Why are the answers to Requirements bande different? Computation of Net Income Cash Flow from Operating Activities