Required information

Problem $2-38$A $($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

Acquired $$63,000$ cash from the issue of common stock.

Purchased $$1,800$ of supplies on account.

Purchased land that cost $$24,000$ cash.

Paid $$1,800$ cash to settle accounts payable created in Event $2.$

Recognized revenue on account of $$48,000.$

Paid $$24,000$ cash for other operating expenses.

Collected $$41,000$ cash from accounts receivable.

Information for Year $1$ Adjusting Entries

Recognized accrued salaries of $$3,500$ on December $31,$ Year $1.$

Had $$500$ of supplies on hand at the end of the accounting period.

Events Affecting the Year $2$ Accounting Period

Acquired $$23,000$ cash from the issue of common stock.

Paid $$3,500$ cash to settle the salaries payable obligation.

Paid $$4,500$ cash in advance to lease office space.

Sold the land that cost $$24,000$ for $$24,000$ cash.

Received $$5,700$ cash in advance for services to be performed in the future.

Purchased $$1,300$ of supplies on account during the year.

Provided services on account of $$35,000.$

Collected $$36,000$ cash from accounts receivable.

Paid a cash dividend of $$8,000$ to the stockholders.

Paid other operating expenses of $$22,500.$Information for Year $2$ Adjusting Entries

The advance payment for rental of the office space $($see Event $3)$ was made on March $1$ for a one$-$year term.

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 $1.$

Had $$600$ of supplies remaining on hand at the end of the period.

Recognized accrued salaries of $$4,200$ at the end of the accounting period.

Recognized $$700$ of accrued interest revenue.Problem $2-38$A $($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 $2,$ using the vertical statements model.

Complete this question by entering your answers in the tabs below.

Req B$2$

Req B$3$

Prepare an income statement for Year $1$ and Year $2.($Do not round intermediate calculations.$)$

ALCORN SERVICE COMPANY

Income Statements

For the Years Ended December $31,$ Year $1$ and Year $2$

$\backslash$table$[[,$Year $1,$Year $2],[,,],[,,],[$Total revenue,,$],[$Expenses$,,],[,,],[,,],[,,],[$Total expenses,,$],[,,]]\backslash$table$[[$ALCORN SERVICE COMPANY$],[$Balance Sheets,$],[$As of December $31,$ Year $1$ and Year $2,,],[$Assets$,$Year $1,$Year $2],[,,],[,,],[,,],[,,],[,,],[$Total assets,,$],[$Liabilities$,,],[,,],[,,],[$Total stockholders' equity,,$],[$Total liabilities and stockholders' equity,,$],[$Stockholders$\text{'}$ Equity,,$],[,,],[,,]]$