Alcorn Service Company was formed on January 1, 2018. Events Affecting the 2018 Accounting Period
Acquired $72,000 cash from the issue of common stock.
Purchased $3,600 of supplies on account.
Purchased land that cost $42,000 cash.
Paid $3,600 cash to settle accounts payable created in Event 2.
Recognized revenue on account of $66,000.
Paid $33,000 cash for other operating expenses.
Collected $50,000 cash from accounts receivable.
Information for 2018 Adjusting Entries
Recognized accrued salaries of $4,400 on December 31, 2018.
Had $1,400 of supplies on hand at the end of the accounting period.
Events Affecting the 2019 Accounting Period
Acquired $32,000 cash from the issue of common stock.
Paid $4,400 cash to settle the salaries payable obligation.
Paid $7,200 cash in advance to lease office space.
Sold the land that cost $42,000 for $42,000 cash.
Received $8,400 cash in advance for services to be performed in the future.
Purchased $2,200 of supplies on account during the year.
Provided services on account of $44,000.
Collected $45,000 cash from accounts receivable.
Paid a cash dividend of $4,000 to the stockholders.
Paid other operating expenses of $31,500.
Information for 2019 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 $1,500 of supplies remaining on hand at the end of the period.
Recognized accrued salaries of $5,100 at the end of the accounting period.
Recognized $1,600 of accrued interest revenue.
b-1. Prepare an income statement for 2018 and 2019.
b-2. Prepare the statement of changes in stockholders’ equity for 2018 and 2019.
b-3. Prepare the balance sheet for 2018 and 2019.
b-4. Prepare the statement of cash flows for 2018 and 2019, using the vertical statements model.