Alcorn Service Company was formed on January 1, 2018.

Events Affecting the 2018 Accounting Period

1. Acquired $72,000 cash from the issue of common stock.

2. Purchased $3,600 of supplies on account.

3. Purchased land that cost $42,000 cash.

4. Paid $3,600 cash to settle accounts payable created in Event2.

5. Recognized revenue on account of $66,000.

6. Paid $33,000 cash for other operating expenses.

7. Collected $50,000 cash from accounts receivable.

Information for 2018 Adjusting Entries

8. Recognized accrued salaries of $4,400 on December 31, 2018.

9. Had $1,400 of supplies on hand at the end of the accountingperiod.

  

Events Affecting the 2019 Accounting Period

1. Acquired $32,000 cash from the issue of common stock.

2. Paid $4,400 cash to settle the salaries payable obligation.

3. Paid $7,200 cash in advance to lease office space.

4. Sold the land that cost $42,000 for $42,000 cash.

5. Received $8,400 cash in advance for services to be performed inthe future.

6. Purchased $2,200 of supplies on account during the year.

7. Provided services on account of $44,000.

8. Collected $45,000 cash from accounts receivable.

9. Paid a cash dividend of $4,000 to the stockholders.

10. Paid other operating expenses of $31,500.

  

Information for 2019 Adjusting Entries

11. The advance payment for rental of the office space (see Event 3)was made on March 1 for a one-year term.

12. The cash advance for services to be provided in the future wascollected on October 1 (see Event 5). The one-year contract startedon October 1.

13. Had $1,500 of supplies remaining on hand at the end of theperiod.

14. Recognized accrued salaries of $5,100 at the end of theaccounting period.

15. Recognized $1,600 of accrued interest revenue.

1. b-1. Prepare an income statement for 2018 and2019.

2. b-2. Prepare the statement of changes instockholders’ equity for 2018 and 2019.

3. b-3. Prepare the balance sheet for 2018 and2019.

4. b-4. Prepare the statement of cash flows for2018 and 2019, using the vertical statements model.