The following information is available for two different types of businesses for the Year 1 accounting year. Hopkins CPAs is a service business that provides accounting services to small businesses. Sports Clothing is a merchandising business that sells sports clothing to college students. Data for Hopkins CPAs

1. Borrowed $39,000 from the bank to start the business.
2. Provided $39,000 of services to clients and collected $39,000 cash.
3. Paid salary expense of $25,000.

Data for Sports Clothing

1. Borrowed $39,000 from the bank to start the business.
2. Purchased $28,000 inventory for cash.
3. Inventory costing $23,500 was sold for $42,000 cash.
4. Paid $3,400 cash for operating expenses.

Required a. Prepare an income statement, balance sheet, and statement of cash flows for each of the companies. (Statement of Cash Flows only, items to be deducted must be indicated with a negative amount.)