Problem 2-43A (Static) Events for two complete accounting cycles LO 2-3, 2-8, 2-9 Alcorn Service Company was formed on January 1, Year 1. Events Affecting the Year 1 Accounting Period 1. Acquired $20,000 cash from the issue of common stock. 2. Purchased $800 of supplies on account. 3. Purchased land that cost $14,000 cash. 4. Paid $800 cash to settle accounts payable created in Event 2. 5. Recognized revenue on account of $10,500. 6. Paid $3,800 cash for other operating expenses. 7. Collected $7,000 cash from accounts receivable. Information for Year 1 Adjusting Entries 8. Recognized accrued salaries of $3,600 on December 31, Year 1. 9. Had $100 of supplies on hand at the end of the accounting period. Events Affecting the Year 2 Accounting Period 1. Acquired $15,000 cash from the issue of common stock. 2. Paid $3,600 cash to settle the salaries payable obligation. 3. Paid $9,000 cash in advance to lease office space. 4. Sold the land that cost $14,000 for $14,000 cash. 5. Received $6,000 cash in advance for services to be performed in the future. 6. Purchased $2,400 of supplies on account during the year. 7 Drovided condcar on account of $21.500 2,400 supplies on Cung ure your 7. Provided services on account of $24,500. 8. Collected $12,600 cash from accounts receivable. 9. Paid a cash dividend of $2,000 to the stockholders. 10. Paid other operating expenses of $2,850. 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 $300 of supplies remaining on hand at the end of the period. 14. Recognized accrued salaries of $4,800 at the end of the accounting period. Required a. Identify each event affecting the Year 1 and Year 2 accounting periods as asset source (AS), asset use (AU), asset exchange (AE), or claims exchange (CE). Record the effects of each event under the appropriate general ledger account headings of the accounting equation. b. Prepare an income statement, statement of changes in stockholders' equity, balance sheet, and statement of cash flows for Year 1 and Year 2, using the vertical statements model. Complete this question by entering your answers in the tabs below. Required A Year 1 Required A Required B Inc Year 2 Stmt Required B Stmt Stkholders Eq Sheet Required B Bal Required B Stmt of Cash Flows Identify each event affecting the Year 1 accounting periods as asset source (AS), asset use (AU), asset exchange (AE), or claims e under the appropriate general ledger account headings of the accounting equation. (Do not round intermediate calculations. Enter Complete this question by entering your answers in the tabs below. Required A Year 1 Year 2 Required A Required B Inc Stmt Required B Stmt Stkholders Ea Required B Bal Sheet Required B Stmt of Cash Flows dentify each event affecting the Year 1 accounting periods as asset source (AS), asset use (AU), asset exchange (AE), or claims exch inder the appropriate general ledger account headings of the accounting equation. (Do not round intermediate calculations. Enter any ninus sign.) ALCORN SERVICE COMPANY Accounting Equation for Year 1 vent Type of Event Cash Accounts Receivable Assets Supplies Liabilities + Stockholders' Equity Prepaid Accounts Land Rent Payable Salaries Payable. Unearned Revenue Common Retained + Stock Earnings 1. 2. 3. 4. 5 6. 7. 8. 9. stals S Required A Year 1 Required A Required B Inc Year 2 Stmt Required B Stmt Stkholders Ea Required B Bal Required B Stmt of Cash Sheet Flows dentify each event affecting the Year 2 accounting periods as asset source (AS), asset use (AU), asset exchange (AE), or claims exchi nder the appropriate general ledger account headings of the accounting equation. (Do not round intermediate calculations. Enter any ign.) ALCORN SERVICE COMPANY Accounting Equation for Year 2 rent Type of Event Assets Liabilities Stockholders' Equit Cash Accounts Receivable Supplies Prepaid Rent Accounts Salaries Unearned Land Payable Payable Revenue Common Retaine Stock Earning Jal 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. stals = Prepare an income statement for Year 1 and Year 2. (Do not round intermediate ALCORN SERVICE COMPANY Income Statements For the Years Ended December 31, Year 1 and Year 2 Total revenue Expenses Total expenses Year 1 Year 2 < Required A Year 2 Required B Stmt St Required A Year 1 Required A Required B Inc Year 2 Required B Required B Bal Stmt Required B Stmt of Cash Stmt Sheet Stkholders Eq Flows Prepare the statement of changes in stockholders' equity for Year 1 and Year 2. ALCORN SERVICE COMPANY Statements of Changes in Stockholders' Equity For the Years Ended December 31, Year 1 and Year 2 Beginning common stock Ending common stock Beginning retained earnings Ending retained earnings Total stockholders' equity Year 1 Year 2 Prepare the balance sheet for Year 1 and Year 2. ALCORN SERVICE COMPANY Balance Sheets As of December 31, Year 1 and Year 2 Assets Total assets Liabilities Total liabilities Stockholders' Equity Total stockholders' equity Total liabilities and stockholders' equity Year 1 Year 2 ALCORN SERVICE COMPANY Statements of Cash Flows For the Years Ended December 31, Year 1 and Year 2 Cash flows from operating activities: Net cash flow from operating activities Cash flows from investing acivities: Net cash flow from investing activities Cash flows from financing activities: Net cash flow from financing activities Net change in cash Ending cash balance Year 1 Year 2