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Events Affecting the Year $1$ Accounting Period

Acquired $$65,000$ cash from the issue of common stock.

Purchased $$2,200$ of supplies on account.

Purchased land that cost $$28,000$ cash.

Paid $$2,200$ cash to settle accounts payable created in Event $2.$

Recognized revenue on account of $$52,000.$

Paid $$26,000$ cash for other operating expenses.

Collected $$43,000$ cash from accounts receivable.

Information for Year $1$ End$-$of$-$Period Adjustments

Recognized accrued salaries of $$3,700$ on December $31,$ Year $1.$

Had $$700$ of supplies on hand at the end of the accounting period.

Events Affecting the Year $2$ Accounting Period

Acquired $$25,000$ cash from the issue of common stock.

Paid $$3,700$ cash to settle the salaries payable obligation.

Paid $$5,100$ cash in advance to lease office space.

Sold the land that cost $$28,000$ for $$28,000$ cash.

Received $$6,300$ cash in advance for services to be performed in the future.

Purchased $$1,500$ of supplies on account during the year.

Provided services on account of $$37,000.$

Collected $$38,000$ cash from accounts receivable.

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

Paid other operating expenses of $$24,500.$

Information for Year $2$ End$-$of$-$Period Adjustments

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 $$800$ of supplies remaining on hand at the end of the period.

Recognized accrued salaries of $$4,400$ at the end of the accounting period,

Required:

a$.$ Identify each event affecting the Year $1$ and Year $2$ accounting periods as asset source, asset use, asset exchange, or claims

exchange. Record the effects of each event under the appropriate account headings of the accounting equation.

b$-1.$ Prepare an income statement for Year $1$ and Year $2.$

b$-2.$ Prepare the statement of changes in stockholders' equity for Year $1$ and Year $2.$

b$-3.$ Prepare the balance sheet for Year $1$ and Year $2.$

b$-4.$ Prepare the statement of cash flows for Year $1$ and Year $2.$

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