Required information Exercise 2-3A Effect of accruals on the financial statements LO 2-1, 2-2, 2-3 [The following information applies to the questions displayed below.) Milea Inc. experienced the following events in Year 1, its first year of operations: 1. Received $20,000 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. Recorded $10,000 of accrued salaries at the end of the year. 6. Paid a $2,000 cash dividend to the stockholders. b-1. Prepare the income statement. MILEA, INC. Income Statement For the Year Ended December 31, Year 1 Revenue Expenses Salaries expense Utility expense 0 Total expenses Net income $ 0 b-2. Prepare the statement of changes in stockholders' equity. MILEA, INC. Statement of Changes in Stockholders' Equity For the Year Ended December 31, Year 1 Beginning common stock Plus: Common stock issued Ending common stock $ Beginning retained earnings Plus: Net income Less: Dividend Ending retained earnings Total stockholders' equity $ 0 0 0 b-3. Prepare the balance sheet. MILEA, INC. Balance Sheet As of December 31, Year 1 Assets Total assets $ 0 Liabilities $ 0 Total liabilities Stockholders' Equity Common stock Total stockholders' equity Total liabilities and stockholders' ecurity 0 b-4. Prepare the statement of cash flows for the Year 1 accounting period. (Amounts to minus sign.) MILEA, INC. Statement of Cash Flows For the Year Ended December 31, Year 1 Cash flow from operating activities Cash paid for expenses Cash received from customers $ 0 Net cash flow from operating activities Cash flow from investing activities Cash flow from financing activities Issue of stock Paid dividend 0 0 Net cash flow from financing activities Net change in cash Plus: Beginning cash balance Ending cash balance $ 0