Alcorn Service Company was formed on January 1, Year 1. Events Affecting the Year 1 Accounting Period 1. Acquired $67,000 cash from the issue of common stock. 2. Purchased $2,600 of supplies on account. 3. Purchased land that cost $32,000 cash. 4. Paid $2,600 cash to settle accounts payable created in Event 2. 5. Recognized revenue on account of $56,000. 6. Paid $28,000 cash for other operating expenses. 7. Collected $45,000 cash from accounts receivable. Information for Year 1 Adjusting Entries 8. Recognized accrued salaries of $3,900 on December 31, Year 1. 9. Had $900 of supplies on hand at the end of the accounting period. Events Affecting the Year 2 Accounting Period 1. Acquired $27,000 cash from the issue of common stock. 2. Paid $3,900 cash to settle the salaries payable obligation. 3. Paid $5,700 cash in advance to lease office space. 4. Sold the land that cost $32,000 for $32,000 cash. 5. Received $6,900 cash in advance for services to be performed in the future. 6. Purchased $1,700 of supplies on account during the year. 7. Provided services on account of $39,000. 8. Collected $40,000 cash from accounts receivable. 9. Paid a cash dividend of $6,000 to the stockholders. 10. Paid other operating expenses of $26,500. Information for Year 2 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 waS collected on October 1 (see Event 5). The one-vear contract started
Alcorn Service Company was formed on January 1, Year 1. Events Affecting the Year 1 Accounting Period 1. Acquired $67,000 cash from the issue of common stock. 2. Purchased $2,600 of supplies on account. 3. Purchased land that cost $32,000 cash. 4. Paid $2,600 cash to settle accounts payable created in Event 2. 5. Recognized revenue on account of $56,000. 6. Paid $28,000 cash for other operating expenses. 7. Collected $45,000 cash from accounts receivable. Information for Year 1 Adjusting Entries 8. Recognized accrued salaries of $3,900 on December 31, Year 1. 9. Had $900 of supplies on hand at the end of the accounting period. Events Affecting the Year 2 Accounting Period 1. Acquired $27,000 cash from the issue of common stock. 2. Paid $3,900 cash to settle the salaries payable obligation. 3. Paid $5,700 cash in advance to lease office space. 4. Sold the land that cost $32,000 for $32,000 cash. 5. Received $6,900 cash in advance for services to be performed in the future. 6. Purchased $1,700 of supplies on account during the year. 7. Provided services on account of $39,000. 8. Collected $40,000 cash from accounts receivable. 9. Paid a cash dividend of $6,000 to the stockholders. 10. Paid other operating expenses of $26,500. Information for Year 2 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 waS collected on October 1 (see Event 5). The one-vear contract started
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter21: Corporations: Taxes, Earnings, Distributions, And The Statement Of Retained Earnings
Section: Chapter Questions
Problem 10SPB
Related questions
Question
100%
Transcribed Image Text:Information for Year 2 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 was collected on October 1 (see Event 5). The one-year contract started
on October 1.
13. Had $1,000 of supplies remaining on hand at the end of the period.
14. Recognized accrued salaries of $4,600 at the end of the accounting period.
Required:
a. Identify each event affecting the Year 1 and Year 2 accounting periods as asset source (AS), asset use (AU), asset exchange (AE), or
claims exchange (CE). Record the effects of each event under the appropriate general ledger account headings of the accounting
equation.
b. Prepare an income statement, statement of changes in stockholders' equity, balance sheet, and statement of cash flows for Year 1
and Year 2, using the vertical statements model.
Complete this question by entering your answers in the tabs below.
Required A
Year 1
Required A
Year 2
Required B Inc
Stmt
Required B
Stmt
Required B Bal
Sheet
Required B
Stmt of Cash
Stkholders Eq
Flows
Identify each event affecting the Year 1 accounting periods as asset source (AS), asset use (AU), asset exchange (AE), or claims exchange (CE). Record
under the appropriate general ledger account headings of the accounting equation. (Do not round intermediate calculations. Enter any decreases to acco
sign.)
ALCORN SERVICE COMPANY
Accounting Equation for Year 1
Assets
Liabilities
Stockholders' Equity
%3D
Туpe
of
Salaries
Prepaid
Rent
Event
Accounts
Accounts
Unearned
Common
Retained
Supplies
Land
%D
Event
Cash
Receivable
Payable
Payable
Revenue
Stock
Earnings
67,000
1.
AS
67,000
2,600
2,600
%3D
2.
AS
32,000 =
3.
AE
(32,000)
(2,600)
%3D
4.
AU
(2,600)
56,000
5.
AS
56,000
< Prev
1 of 1
Next
Transcribed Image Text:Alcorn Service Company was formed on January 1, Year 1.
Events Affecting the Year 1 Accounting Period
1. Acquired $67,000 cash from the issue of common stock.
2. Purchased $2,600 of supplies on account.
3. Purchased land that cost $32,000 cash.
4. Paid $2,600 cash to settle accounts payable created in Event 2.
5. Recognized revenue on account of $56,000.
6. Paid $28,000 cash for other operating expenses.
7. Collected $45,000 cash from accounts receivable.
Information for Year 1 Adjusting Entries
8. Recognized accrued salaries of $3,900 on December 31, Year 1.
9. Had $900 of supplies on hand at the end of the accounting period.
Events Affecting the Year 2 Accounting Period
1. Acquired $27,000 cash from the issue of common stock.
2. Paid $3,900 cash to settle the salaries payable obligation.
3. Paid $5,700 cash in advance to lease office space.
4. Sold the land that cost $32,000 for $32,000 cash.
5. Received $6,900 cash in advance for services to be performed in the future.
6. Purchased $1,700 of supplies on account during the year.
7. Provided services on account of $39,000.
8. Collected $40,000 cash from accounts receivable.
9. Paid a cash dividend of $6,000 to the stockholders.
10. Paid other operating expenses of $26,500.
Information for Year 2 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 waS collected on October 1 (see Event 5). The one-vear contract started
< Prev
1 of 1
Next
MacBook Pro
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
Recommended textbooks for you
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,