Prepare the statement of cash flows for Year 1. Note: Cash outflows should he indicated with a minus sion. Organize the transaction data in accounts under an accounting equation for Year 1. Note: 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. 1. Prepare the income statement, statement of changes in stockholders' equity, balance sheet, and statement of cash flows for Ye Complete this question by entering your answers in the tabs below. Prepare the income statement for Year 1. Prepare the balance sheet for Year 1 . -1. Prepare the income statement, statement of changes in stockholders' equity, balance sheet, and statement of cash flows Complete this question by entering your answers in the tabs below. Prepare the statement of changes in stockholders' equity for Year 1. Prepare the balance sheet for Year 2 . Organize the transaction data in accounts under an accounting equation for Year 2. Note: 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. The following transactions apply to Jova Company for Year 1, the first year of operation: 1. Issued $20,000 of common stock for cash. 2. Recognized $60,000 of service revenue earned on account. 3. Collected $54,000 from accounts receivable. 4. Paid operating expenses of $37,800. 5. Adjusted accounts to recognize uncollectible accounts expense. Jova uses the allowance method of accounting for uncollectible accounts and estimates that uncollectible accounts expense will be 2 percent of sales on account. The following transactions apply to Jova for Year 2: 1. Recognized $67,500 of service revenue on account. 2. Collected $62,000 from accounts receivable. 3. Determined that $800 of the accounts receivable were uncollectible and wrote them off. 4. Collected $300 of an account that had previously been written off. 5. Paid $47,500 cash for operating expenses. 6. Adjusted the accounts to recognize uncollectible accounts expense for Year 2. Jova estimates uncollectible accounts expense will be 1.0 percent of sales on account. Required Complete the following requirements for Year 1 and Year 2. Complete all requirements for Year 1 prior to beginning the requirements for Year 2 . Prepare the statement of changes in stockholders' equity for Year 2. b. Show the effect of each transaction on the elements of the financial statements, using a horizontal statements model. In the Statement of Cash Flows column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). The first transaction is entered as an example. (Hint. Closing entries do not affect the statements model.) Note: Note: Leave cells blank if no input is needed. Prepare the statement of cash flows for Year 2. Note: Cash outflows should be indicated with a minus sign. Prepare the income statement for Year 2. a. Identify the type of each transaction (asset source, asset use, asset exchange, or claims exchange). \begin{tabular}{|c|c|} \hline \begin{tabular}{c} Event \\ Number \end{tabular} & Type of Transaction \\ \hline Year 1 & \\ \hline 1. & \\ \hline 2. & \\ \hline 3. & \\ \hline 4. & \\ \hline 5. & \\ \hline Year 2 & \\ \hline 1. & \\ \hline 2. & \\ \hline 3. & \\ \hline 4a. & \\ \hline 4 b. & \\ \hline 5. & \\ \hline 6. & \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|c|c|} \hline \\ \hline \multicolumn{13}{|c|}{ Horizontal Statements Model } \\ \hline \multirow[b]{2}{*}{ Event } & \multicolumn{5}{|c|}{ Balance Sheet } & \multicolumn{5}{|c|}{ Income Statement } & \multirow{2}{*}{\multicolumn{2}{|c|}{ Statement of Cash Flows }} \\ \hline & Assets & = & Liabilities & + & Equity & Revenues & - & Expenses & = & Net Income & & \\ \hline \multicolumn{13}{|l|}{ Year 1} \\ \hline 1. & Increase & = & & + & Increase & & - & & = & & Increase & FA \\ \hline 2. & & = & & + & & & - & & = & & & \\ \hline 3. & & = & & + & & & - & & = & & & \\ \hline 4. & & = & & + & & & - & & = & & & \\ \hline 5. & & = & & + & & & -1 & & = & & & \\ \hline \multicolumn{13}{|l|}{ Year 2} \\ \hline 1. & & = & & + & & & - & & = & & & \\ \hline 2. & & = & & + & & & - & & = & & & \\ \hline 3. & & = & & + & & & - & & = & & & \\ \hline 4a. & & = & & + & & & - & & = & & & \\ \hline & & = & & + & & & - & & = & & & \\ \hline 5. & & = & & + & & & - & & = & & & \\ \hline 6. & & = & & + & & & - & & = & & & \\ \hline \end{tabular}