[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 $74,000 cash from the issue of common stock.

Purchased $4,000 of supplies on account.

Purchased land that cost $46,000 cash.

Paid $4,000 cash to settle accounts payable created in Event 2.

Recognized revenue on account of $70,000.

Paid $35,000 cash for other operating expenses.

Collected $52,000 cash from accounts receivable.

Information for Year 1 Adjusting Entries

Recognized accrued salaries of $4,600 on December 31, Year 1.

Had $1,600 of supplies on hand at the end of the accounting period.

Events Affecting the Year 2 Accounting Period

Acquired $34,000 cash from the issue of common stock.

Paid $4,600 cash to settle the salaries payable obligation.

Paid $7,800 cash in advance to lease office space.

Sold the land that cost $46,000 for $46,000 cash.

Received $9,000 cash in advance for services to be performed in the future.

Purchased $2,400 of supplies on account during the year.

Provided services on account of $46,000.

Collected $47,000 cash from accounts receivable.

Paid a cash dividend of $6,000 to the stockholders.

Paid other operating expenses of $33,500.

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 $1,700 of supplies remaining on hand at the end of the period.

Recognized accrued salaries of $5,300 at the end of the accounting period.

Recognized $1,800 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.