The following transactions pertain to Accounting Solutions Inc. Assume the transactions for the purchase of the computer and any capital improvements occur on January 1 each year. Year 1 ats 1. Acquired $80,000 cash from the issue of common stock 2. Purchased a computer system for $35,000. It has an estimated useful life of five years and a $5,000 salvage value. 3. Pald $2.450 sales tax on the computer system 4. Collected $65,000 in fees from clients 5. Paid $1.500 in fees for routine maintenance to service the computers 8. Recorded double-declining balance depreciation on the computer system for Year 1 Year 2 1. Paid $1,000 for repairs to the computer system. 2 Bought off-site backup services to maintain the computer system, $1.500. 3. Collected $68,000 in fees from clients 4. Paid $1.500 in fees to service the computers 5. Recorded double-declining-balance depreciation for Year 2 Year 3 1. Paid $6,000 to upgrade the computer system, which extended the total life of the system to six years. The salvage value did not change 2. Paid $1.200 in fees to service the computers 3. Collected $70,000 in fees from clients. 4. Recorded double-declining balance depreciation for Year 3. Required a. Record the above transactions in a horizontal statements model b-1. Prepare income statements for Year 1 Year 2 and Year 3. 6-2. Prepare statements of changes in stockholders' equity for Year 1. Year 2 nd Year 3. b-3. Prepare balance sheets for Year 1 Year 2, and Year 3. b-4. Prepare statements of cash flows for Year 1 Year 2, and Year 3. Event Year 1 Nor Income Statement of Cash Flow 1 2 3 ACCOUNTING SOLUTIONS INC Horizontal Statements Model Year 1 Balance Sheet Income Statement Assets Stockholders' Equity BV Casti Common Retained Reven Expense Equipment Stock Earnings 00.000 1. 0 30 000 O (35.000) 35 000 0. 0 0 12.450) 2.450 0 . 65.000 + 65.000 65000 0.500) . (1.500) 1.500 O (14.500) (14980) 0 14.900 106,050 22.470 80,000 . 48.520 65.000 16.480 - FA 4 30 000 (35.000) 0 (2450) 65.000 65.000 (1500) (100) (14900) 0 18520 106.050 OOOOO 6 Bal NC Het Reg A Year 2 > Record the above transactions in a horizontal statements model for Year 2 in the Catholicate whether them is an operating activity (O) Investing activity (IA), a financing activity (TA), ar net dange in cash) antent is oot leded by the event, lave the cell blank Enter any decreas account balances and cash out with a mission to all wenty ACCOUNTING SOLUTIONS INC Hohe Stockholders by Yes OV B 22.470 000001 1 . 106 050 (1000) 11 500) 8000 (1 600) 11.00 11 50 1000 1500 2 - . 11000 1100 11 500 0 0 110 183818 OOOO 00 30 (1500) 5 Bal DO (30) 11.12 170 050 50 000 103.5 68.000 SS. NO . (Reg A Year 1 Reg A Year 3 > Prey 1 of 1 H Next vent Year Statement of Cash Flow Net Income Cast ACCOUNTING SOLUTIONS INC Harital Statement Model Year) Balance Sheet Income Statement Assets Stockholders' Equity BV Common Retained Rivene Expense Equipment Stock Earnings 13.482 00.000 103,532 6000 (1200) 1.200 70 000 70.000 . (4.494) (4494) 44940 14.90 30 000 . 167 838 70,000 5.694 Bal - 170,050 (5000) (1200) 70.000 2 170.050 (6.000) (1200) (1 200) 70000 70.000 6406 133.100 232350 + 4 Bal 232.60 Req Bl Inc Stmt ACCOUNTING SOLUTIONS INC. Income Statement For the Year Ended December 31 Year 1 Year 2 Year 3 Service revenue $ 65,000$ 68,000$ 70,000 Expenses Service fee expense 1,500 1,500 1,200 Depreciation expense 14,980 8,988 4,494 X Maintenance expense 3,000 SI Total expenses Net income 16,480 $ 48,520 13,488 $ 55,012 5,694 $ 64,306