Prepare an income statement for Year 1 and Year 2. Problem 2-38A (Algo) Events for two complete accounting cycles LO 2-1, 2-2, 2-3, 2-4, 2-5, 2-6, 2-7, 2-8, 2-9 [The following information applies to the questions displayed below.] Alcorn Service Company was formed on January 1, Year 1. Events Affecting the Year 1 Accounting Period 1. Acquired $68,000 cash from the issue of common stock. 2. Purchased $2,800 of supplies on account. 3. Purchased land that cost $34,000 cash. 4. Paid $2,800 cash to settle accounts payable created in Event 2. 5. Recognized revenue on account of $58,000. 6. Paid $29,000 cash for other operating expenses. 7. Collected $46,000 cash from accounts receivable. Information for Year 1 Adjusting Entries 8. Recognized accrued salaries of $4,000 on December 31, Year 1. 9. Had $1,000 of supplies on hand at the end of the accounting period. Events Affecting the Year 2 Accounting Period 1. Acquired $28,000 cash from the issue of common stock. 2. Paid $4,000 cash to settle the salaries payable obligation. 3. Paid $6,000 cash in advance to lease office space. 4. Sold the land that cost $34,000 for $34,000 cash. 5. Received $7,200 cash in advance for services to be performed in the future. 6. Purchased $1,800 of supplies on account during the year. 7. Provided services on account of $40,000. 8. Collected $41,000 cash from accounts receivable. 9. Paid a cash dividend of $7,000 to the stockholders. 10. Paid other operating expenses of $27,500. Information for Year 2 Adjusting Entries 11. The advance payment for rental of the office space (see Event 3) was made on March 1 for a one-year term. 12. The cash advance for services to be provided in the future was collected on October 1 (see Event 5). The one-year contract started on October 1. 13. Had $1,100 of supplies remaining on hand at the end of the period. 14. Recognized accrued salaries of $4,700 at the end of the accounting period. 15. Recognized $1,200 of accrued interest revenue. Problem 2-38A (Algo) Part b b-1. Prepare an income statement for Year 1 and Year 2. b-2. Prepare the statement of changes in stockholders' equity for Year 1 and Year 2. b-3. Prepare the balance sheet for Year 1 and Year 2. b-4. Prepare the statement of cash flows for Year 1 and Year 2. usina the vertical statements model. Prepare the statement of changes in stockholders' equity for Year 1 and Year 2. Prepare the balance sheet for Year 1 and Year 2 . Prepare the statement of cash flows for Year 1 and Year 2, using the vertical statements model