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Colton Enterprises experienced the following events for Year 1, the first year of operation:

1. Acquired $55,000 cash from the issue of common stock.
2. Paid $14,000 cash in advance for rent. The payment was for the period April 1, Year 1, to March 31, Year 2.
3. Performed services for customers on account for $112,000.
4. Incurred operating expenses on account of $45,000.
5. Collected $85,500 cash from accounts receivable.
6. Paid $41,000 cash for salary expense.
7. Paid $36,000 cash as a partial payment on accounts payable.

Adjusting Entries

8. Made the adjusting entry for the expired rent. (See Event 2.)
9. Recorded $6,400 of accrued salaries at the end of Year 1.

Events for Year 2

1. Paid $6,400 cash for the salaries accrued at the end of the prior accounting period.
2. Performed services for cash of $61,000.
3. Purchased $4,800 of supplies on account.
4. Paid $16,500 cash in advance for rent. The payment was for one year beginning April 1, Year 2.
5. Performed services for customers on account for $128,000.
6. Incurred operating expenses on account of $61,500.
7. Collected $109,000 cash from accounts receivable.
8. Paid $59,000 cash as a partial payment on accounts payable.
9. Paid $33,500 cash for salary expense.
10. Paid a $11,000 cash dividend to stockholders.

Adjusting Entries

11. Made the adjusting entry for the expired rent. (Hint: Part of the rent was paid in Year 1.)
12. Recorded supplies expense. A physical count showed that $450 of supplies were still on hand.

Cash Accounts Receivable Beg. Bal. Beg. Bal. End. Bal. End. Bal. Prepaid Rent Supplies Beg. Bal. Beg. Bal. End. Bal. End. Bal. Accounts Payable Salaries Payable Beg. Bal. Beg. Bal. End. Bal. End. Bal. Common Stock Retained Earnings Beg. Bal. Beg. Bal. End. Bal. End. Bal. Dividends Service Revenue Beg. Bal. Beg. Bal. End. Bal. End. Bal. Rent Expense Operating Expenses Beg. Bal. Beg. Bal. End. Bal. End. Bal. Salaries Expense Supplies Expense Beg. Bal. Beg. Bal. End. Bal. End. Bal. COLTON ENTERPRISES Trial Balance December 31, Year 2 Account Titles Debit Credit Totals $ 0 $ 0 COLTON ENTERPRISES Income Statement For the Year Ended December 31, Year 2 Expenses Total expenses 0 $ 0 7 COLTON ENTERPRISES Statement of Changes in Stockholders' Equity For the Year Ended December 31, Year 2 $ 0 0 Total stockholders' equity $ 0 COLTON ENTERPRISES Balance Sheet As of December 31, Year 2 Assets $ 0 Total assets Liabilities $ 0 Total liabilities Stockholders' equity 0 Total stockholders' euity Total liabilities and stockholders' equity $ 0 COLTON ENTERPRISES Statement of Cash Flows For the Year Ended December 31, Year 2 Cash flows from operating activities: $ 0 Net cash flow from operating activities Cash flows from investing activities Cash flows from financing activities: 0 Net cash flow from financing activities Net change in cash 0

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