The following transactions relate to cademy Towing Service Assume the transactions for the purchase of the wrecker and any capital improvements occur on January 1 of each year. Assume all transactions were in cash Year 1 1. Acquired $72.000 cash from the issue of common stock 2. Purchased a used wrecker for $34,000. It has an estimated useful life of three years and a $3,000 salvage value 3. Paid sales tax on the wrecker of $5,000 4. Collected $58.100 in towing fees. 5. Paid $12.200 for gasoline and oil 6. Recorded straight line depreciation on the wrecker for Year 1 7. Closed the revenue and expense accounts to Retained Earnings at the end of Year 1 Year 2 1. Paid for a tune-up for the wrecker's engine, $1,100. 2. Bought four new tires. $1,450 3. Collected $64,000 in towing fees 4. Paid $18.200 for gasoline and od 5. Recorded straight line depreciation for Year 2 6. Closed the revenue and expense accounts to retained Earnings at the end of Year 2. Year 3 1. Paid to overhaul the wrecker's engine. 55,000, which extended the life of the wrecker to a total of four years. The salvage value did not change 2. Paid for gasoline and oil. $19,300. 3. Collected $67,000 in towing fees 4. Recorded straight-line depreciation for Year 3 5. Closed the revenue and expense accounts at the end of Year 3 Required a. Use a horizontal statements model to show the effect of these transactions on the elements of financial statements. Use + for Increase, - for decrease, and leave blank for not affected. b. Prepare an income statement, a statement of changes in stockholders' equity, a balance sheet, and a statement of cash flows for Year 1 Year 2, and Year 3. Prey 1 of 5 Next >