Question

Help Required information The following information applies to the questions displayed below.) Alcorn Service Company was formed on January 1, 2018. Events Affecting the 2018 Accounting Period 1. Acquired $64,000 cash from the issue of common stock. 2. Purchased $2,000 of supplies on account. 3. Purchased land that cost $26.000 cash. 4. Paid $2,000 cash to settle accounts payable created in Event 2. 5. Recognized revenue on account of $50,000. 6. Paid $25,000 cash for other operating expenses. 7. Collected $42,000 cash from accounts receivable. Information for 2018 Adjusting Entries 8. Recognized accrued salaries of $3,600 on December 31, 2018 9. Had $600 of supplies on hand at the end of the accounting period. Events Affecting the 2019 Accounting Period 1. Acquired $24,000 cash from the issue of common stock. 2. Paid $3,600 cash to settle the salaries payable obligation 3. Paid $4,800 cash in advance to lease office space. 4. Sold the land that cost $26,000 for $26,000 cash. 5. Received $6,000 cash in advance for services to be performed in the future. 6. Purchased $1,400 of supplies on account during the year. 7. Provided services on account of $36,000. 8. Collected $37.000 cash from accounts receivable. 9. Paid a cash dividend of $9,000 to the stockholders. 10. Paid other operating expenses of $23,500. Information for 2019 Adjusting Entries

Answer 1

Liabilties Interest Accounts Salaries Unearned Receivable = Payable Payable Revenue + Stockholders Equity Common Retained + Stock + Earnings + 64,000 + Land Calculation 2,000 + 26,000 + + Alcorn Service Company 2018 Assets Accounts Prepaid Events Type Cash Receivable Supplies Rent 1 AS 64,000 2 AS 2,000 3 | AE (26,000) AU (2,000) 50,000 AU (25,000) 7 AE 42,000 (42,000) 8 CE 9 AU (1,400) Totals 53,000 8,000 600 (2,000) + + AS + + 50,000 (25,000) Service Revenue Other operating expenses + + + + 3,600 + (3,600) (1,400) =2,000-600 20,000 Salaries expense Supplies expense 26,000 3,600 64,000 + + + + + + + 2019 Assets Liabilties + Stockholders Equity Accounts Prepaid Interest Accounts Salaries Unearned Common Retained Events Type Cash Receivable Supplies Rent Land Receivable = Payable Payable Revenue + Stock + Earnings Calculation Bal. 53,000 8,000 600 26,000 3,600 + 64,000 + 20,000 1 AS 24,000 + 24,000 + AU (3,600) (3,600) (4,800) 4,800 26,000 (26,000) 5 AS 6,000 6,000 + 1,400 1,400 AS 36,000 36,000 37,000 (37,000) (9,000) (9,000) 10 AU (23,500) (23,500) 11 AU (4,000) (4,000) =4,800/12*10 12 CE (1,500) + 1,500 56,000/12*3 13 AU (1,300) (1,300) =600+1,400-700 14 CE 4,300 (4,300) 15 AS 800 = Totals 105,100 7,000 700 800 800 = 1,400 4,300 4,500 + 88,000 + 16,200 + Service Revenue + + + + + + + + + Dividends Other operating expenses Rent expense Service Revenue Supplies expense Salaries expense Interest Revenue + + + 800 Simple explanation Asset source is increase in assets Asset use is decrease in assets Asset exchange is exchange of one asset for another asset Claims exchange is no change in asset, meaning exchange of liabilty for equity

2018 2019 50,000 Alcorn Service Company Income Statement For the Years Ended December 31, 2018 and 2019 Revenues Service Revenue Interest Revenue Total Revenues Expenses Other operating expense Salaries expense Supplies expense 37,500 800 38,300 50,000 25,000 3,600 1,400 23,500 4,300 1,300 4,000 33,100 5,200 Total Expenses Net Income 30,000 20,000 2018 64,000 64,000 Statement of Changes in Stockholders Equity For the Years Ended December 31, 2018 and 2019 Beginning Common Stock Issue of common stock Ending Common Stock Beginning Retained Earnings Add: Net Income Less: Dividends Ending Retained Earnings Total Stockholders Equity 2019 64,000 24,000 88,000 20,000 5,200 (9,000) 16,200 104,200 20,000 20,000 84,000

Alcorn Service Company Balance Sheet As of December 31, 2018 and 2019 Assets Current Assets 2018 2019 Cash 53,000 8,000 600 Accounts Receivable Supplies Prepaid Rent Interest Receivable Total Current Assets 105,100 7,000 700 800 800 114,400 61,600 Fixed Assets Land Total Assets 26,000 87,600 114,400 Liabilities & Stockholders Equity Liabilities Accounts Payable Salaries Payable Unearned Revenue Total Liabilities 3,600 1,400 4,300 4,500 10,200 3,600 Stockholders Equity Common Stock Retained earnings Total Stockholders Equity Total Liabilities & Stockholders Equity 64,000 20,000 84,000 87,600 88,000 16,200 104,200 114,400

Alcorn Service Company Cashflow Statement For the Years Ended December 31, 2018 and 2019 Calculation 2019 2018 2019 Cash flows from Operating Activities Cash receipts from customers Cash payments to creditors Cash payments for other operating expenses Net Cash flow from Operating Activities 37000 + 6000 -3600 + - 4800 42,000 (2,000) (25,000) 15,000 43,000 (8,400) (23,500) 11,100 (26,000) Cash flows from Investing Activities Purchase of Land Proceeds from sale of land Net Cash flow from Investing Activities 26,000 26,000 (26,000) 64,000 Cash flows from Financing Activities Proceeds from issue of common stock Dividends paid Net Cash flow from Financing Activities 24,000 (9,000) 15,000 64,000 53,000 Net Change in Cash Beginning Cash Balance Ending Cash Balance 52,100 53,000 105,100 53,000