Problem 3-31A Events for two complete accounting cycles

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 End-of-Period Adjustments

1. Recognized accrued salaries of $3,600 on December 31, Year 1.
2. 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. 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 End-of-Period Adjustments

1. The advance payment for rental of the office space (see Event 3) was made on March 1 for a one-year term.
2. The cash advance for services to be provided in the future was collected on October 1 (see Event 5).
3. Had $300 of supplies remaining on hand at the end of the period.
4. Recognized accrued salaries of $4,800 at the end of the accounting period.

Required

1. 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 account headings of the accounting equation.
2. Prepare an income statement, statement of changes in stockholders' equity, balance sheet, and statement of cash flows for Year 1 and Year 2.

Required Use the accounts and balances from Barker Company to construct an income statement, stalementid changes in stockholders' equity, balance sheet, and statement of cash flows (show only fotals for eled activity on the statement of cash flows). Problem 3-31A Events for two complete accounting cycles 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 accounc. 3. Purchased land that cost $14,000 cash. 4. Paid $00 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 End-of-Period Adjustments 8. Recognized acerued 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 sularies payable obligation. 3. Paid 59,000cash in advance to lease office space. 4. Sold the land that coit $14,000 for $14,000 cash. 5. Received $6,000 eash in advance for services to be performed in the future. 6. Purchased $2.400 of supplies on account during the year. 7. Provided servees on account of $24,500. 8. Coliceted $12,600 cash from accounts recelvable. 9. Puid a cash dividend or $2,000 to the stockhiolders. 10. Paid otber operating expenses or $2,850. Information for Year 2. End-of-Period Adjustments 11. The advance payment for rental of the office space (see Event 3) was made on March 1 for 3 oncyear termi. 12. The cash atwance for services to be provided in the future was colloctod on October t (see Event 5) The oneycar 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 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 I and Year 2