The following transactions pertain to Accounting Solutions Incorporated Assume the transactions for the purchase of the computer and any capital improvements occur on January 1 each year. Year 1 1. Acquired $67,000 cash from the issue of common stock. 2. Purchased a computer system for $23,500. It has an estimated useful life of five years and a $2,350 salvage value. 3. Paid $1,500 sales tax on the computer system. 4. Collected $31,410 in fees from clients. 5. Paid $1,080 in fees for routine maintenance to service the computers. 6. Recorded double-declining-balance depreciation on the computer system for Year 1. Year 2 1. Paid $840 for repairs to the computer system. 2. Bought off-site backup services to maintain the computer system, $1,430. 3. Collected $34,410 in fees from clients. 4. Paid $920 in fees to service the computers. 5. Recorded double-declining-balance depreciation for Year 2. Year 3

1. Paid $2,700 to upgrade the computer system, which extended the total life of the system to six years. The salvage value did not change. 2. Paid $880 in fees to service the computers. 3. Collected $35,910 in fees from clients. 4. Recorded double-declining-balance depreciation for Year 3. Required a. Use a horizontal financial statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. More specifically, record the amounts of the events into the model. Also, in the Statement of Cash Flows column, classify the cash flows as operating activities (OA), investing activities (IA), or financing activities (FA). b-1. Prepare income statements for Year 1, Year 2, and Year 3. b-2. Prepare statements of changes in stockholders' equity for Year 1, Year 2, and Year 3. b-3. Prepare balance sheets for Year 1, Year 2, and Year 3. b-4. Prepare statements of cash flows for Year 1, Year 2, and Year 3. Complete this question by entering your answers in the tabs below. ACCOUNTING SOLUTIONS INCORPORATED Horizontal Statements Model - Year 1