1. Milea Inc. experienced the following events in Year 1.
   1. Received $100,000 cash from the issue of common stock.
   2. Performed services on account for $56,000.
   3. Paid the utility expense of $2,500
   4. Collected $48,000 of the accounts receivable.
   5. Received $15,000 as a deposit for services to be performed in Year 2.
   6. During the year paid $30,000 of salaries
   7. Recorded $10,000 of accrued salaries at the end of the year to be paid at the beginning of the next year.
   8. On July 1^st paid $12,000 for a one-year insurance policy.
   9. Performed services for cash for $15,000.
   10. Borrowed $10,000 on July 1^st at an interest rate of 6% for one year. Be sure to accrue interest expense as of 12/31. The loan and all interest will be paid on June 30^th.
   11. Bought $2,000 of supplies during the year on account.
   12. Bought equipment on January 1^st for $25,000 paying $10,000 in cash and signing a note payable for the remaining balance. The note is for 2 years at an interest rate of 10%. Interest for this year is paid on December 31^st.
   13. Paid a $2,000 cash dividend to the stockholders.

Adjustments:

1. 1. An inventory of supplies at the end of the year determined that only $400 of supplies remained
   2. Accrue interest on the note for 6 months
   3. Recognize that 6 months of the insurance policy has expired.
2. 4. Record depreciation expense assuming that the equipment has a useful life of 10 years.
   5. Accrue and pay interest on the $15,000 note.

Determine the balances at the end of the first year in:

Cash

A/R

Equipment

Less: Accumulated Depreciation

Equipment (net)

Unearned Revenue

Earned Revenue

Net Income