Question

Help 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 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. Pald other operating expenses of $23,500. Information for 2019 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.

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