The following transactions apply to Walnut Enterprises for Year 1, its first year of operations: 1. Received $50,000 cash from the issue of a short-term note with a 6 percent interest rate and a one-year maturity. The m was made on April 1, Year 1. 2. Received $130,000 cash plus applicable sales tax from performing services. The services are subject to a sales tax rate percent. 3. Paid $62,000 cash for other operating expenses during the year. 4. Paid the sales tax due on $110,000 of the service revenue for the year. Sales tax on the balance of the revenue is not duuntil Year 2 5. Recognized the accrued interest at December 31, Year 1. The following transactions apply to Walnut Enterprises for Year 2: 1. Paid the balance of the sales tax due for Year 1. 2. Received $201,000 cash plus applicable sales tax from performing services. The services are subject to a sales tax rate percent. 3. Repaid the principal of the note and applicable interest on April 1, Year 2. Record accrued interest as transaction 3a and repayment of the principal the note and applicable interest as transaction 3b. 4. Paid $102,500 of other operating expenses during the year. 5. Paid the sales tax due on $185,000 of the service revenue. The sales tax on the balance of the revenue is not due until Y 3.

Organize the transaction data in accounts under an accounting equation. Note: Do not round intermediate calculations. Enter any decreases to account balances with a minus sign. Leave the c the "Account Titles for Retained Earnings". Not all cells will require entry. Prepare an income statement for Year 1 and Year 2. Note: Do not round intermediate calculations. Prepare a statement of changes in stockholders' equity for Year 1 a WALNUT ENTERPRISES Statement of Cash Flows For the Year Ended December 31, Year 1 Organize the transaction data in accounts under an accounting equation. Note: Do not round intermediate calculations. Enter any decreases to account balances with a minus sign. Leave the c the "Account Titles for Retained Earnings". Not all cells will require entry. Prepare an income statement for Year 1 and Year 2. Note: Do not round intermediate calculations. Prepare a statement of changes in stockholders' equity for Year 1 a WALNUT ENTERPRISES Statement of Cash Flows For the Year Ended December 31, Year 1