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 $90,000 from the bank to start the business.

2. Provided $60,000 of services to clients and collected $50,000 cash.

3. Paid salary expense of $32,000.

Data for Sports Clothing

Borrowed $90,000 from the bank to start the business.

1. Purchased $60,000 inventory for cash.

2. Inventory costing $26,000 was sold for $50,000 cash.

3. Paid $8,000 cash for operating expenses.

Required

A). Prepare an income statement, balance sheet, and statement of cash flows for each of the companies.