Required information [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 1. Acquired $78,000 cash from the issue of common stock. 2. Purchased $4,800 of supplies on account. 3. Purchased land that cost $54,000 cash. 4. Paid $4,800 cash to settle accounts payable created in Event 2. 5. Recognized revenue on account of $78,000. 6. Paid $39,000 cash for other operating expenses. 7. Collected $56,000 cash from accounts receivable. Information for Year 1 Adjusting Entries 8. Recognized accrued salaries of $5,000 on December 31, Year 1. 9. Had $2,000 of supplies on hand at the end of the accounting period. Events Affecting the Year 2 Accounting Period 1. Acquired $38,000 cash from the issue of common stock. 2. Paid $5,000 cash to settle the salaries payable obligation. 3. Paid $9,000 cash in advance to lease office space. 4. Sold the land that cost $54,000 for $54,000 cash. 5. Received $10,200 cash in advance for services to be performed in the future. 6. Purchased $2,800 of supplies on account during the year. 7. Provided services on account of $50,000. 8. Collected $51,000 cash from accounts receivable. 9. Paid a cash dividend of $4,000 to the stockholders. 10. Paid other operating expenses of $37.500. 11 9. Had $2,000 of supplies on hand at the end of the accounting period. Events Affecting the Year 2 Accounting Period 1. Acquired $38,000 cash from the issue of common stock. 2. Paid $5,000 cash to settle the salaries payable obligation. 3. Paid $9,000 cash in advance to lease office space. 4. Sold the land that cost $54,000 for $54,000 cash. 5. Received $10,200 cash in advance for services to be performed in the future. 6. Purchased $2,800 of supplies on account during the year. 7. Provided services on account of $50,000. 8. Collected $51,000 cash from accounts receivable. 9. Paid a cash dividend of $4,000 to the stockholders. 10. Paid other operating expenses of $37,500. 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 $2,100 of supplies remaining on hand at the end of the period. 14. Recognized accrued salaries of $5,700 at the end of the accounting period. 15. Recognized $2,200 of accrued interest revenue. 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. Req B1 Req B2 Req B3 Req B4 Prepare an income statement for Year 1 and Year 2. (Do not round intermediate c- ALCORN SERVICE COMPANY Income Statements For the Years Ended December 31, Year 1 and Year 2 Service revenue Interest revenue Year 1 $ 78,000 0 Year 2 Total revenue 78,000 0 ces Expenses Operating expenses 39,000 37,500 Salaries expense 5,000 5,700 Supplies expense 2,000 1,600 Rent expense 0 7,500 Total expenses 46,000 52,300 Net income $ 32,000 $ (52,300) Req B1 Req B2 > Complete this Req B1 Reg-B2 Req B3 Req B4 Prepare the statement of changes in stockholders' equity for Year ALCORN SERVICE COMPANY Statement of Changes in Stockholders' Equity For the Years Ended December 31, Year 1 and Year 2 Year 1 Year 2 Beginning common stock $ 0 $ 78,000 Plus: Stock issued 78,000 38,000 Ending common stock 78,000 116,000 Beginning retained earnings 32,000 es Plus: Net income 32,000 Less: Dividend Ending retained earnings 32,000 32,000 Total stockholders' equity $110,000 $ 148,000 ALCORN SERVICE COMPANY Balance Sheets As of December 31, Year 1 and Year 2 Assets Cash Accounts receivable Supplies Prepaid rent Interest receivable Total assets Liabilities Accounts payable Salaries payable Unearned revenue Total liabilities Stockholders' Equity + Year 1 Year 2 $ 0 $ 0 0 0 Common stock Retained earnings Total stockholders' equity 0 Total liabilities and stockholders' equity $ 0 $ 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 activities Year 1 Year 2 0 0 + Net cash flow from investing activities 0 0 Cash flows from financing activities Net cash flow from financing activities Net change in cash Ending cash balance 0 0 0 0 $ 0 $ 0