Question

Holmes Cleaning Service began operation on January 1, Year 1. The company experienced the following events for its first year of operations: Events Affecting Year 1: 1. Provided $190,000 of cleaning services on account. 2. Collected $142,500 cash from accounts receivable, 3. Paid salaries of $34,000 for the year. 4. Adjusted the accounts to reflect management's expectations that uncollectible accounts expense would be $1,500. The expense was determined using the percent of revenue method. Required a. Organize the transaction data in accounts under an accounting equation b. Prepare an income statement, a balance sheet, and a statement of cash flows for Year 1. Complete this question by entering your answers in the tabs below. Reg A Reg B1 Req B2 Reg B3

Answer 1

	Assets				Equity	Account Titles for Retained Earnings
			NRV		Retained
	Cash	+	Accnt. Rec.	=	Earnings
Year 1
1)			$ 1,90,000.00		$ 1,90,000.00	Service Revenue
2)	$ 1,42,500.00		$ -1,42,500.00
3)	$ -34,000.00				$ -34,000.00	Salaries Expense
4)			$      -1,500.00		$     -1,500.00	Uncollectible Accounts Expense
Bal.	$1,08,500.00		$     46,000.00		$1,54,500.00

Balance Sheet
Assets:
Cash					$ 1,08,500.00
Accounts Receivable				$    47,500.00
Allowance for uncollectible accounts				$     -1,500.00	$    46,000.00
Total Assets					$ 1,54,500.00
Liabilities:
Stockholder's Equity:
Retained Earnings				$ 1,54,500.00
Total stockholder's equity					$ 1,54,500.00
Total Liabilities and Stockholder's Equity					$ 1,54,500.00

Statement of Cash Flows
Cash flows from operating activities:
Cash received from customers				$ 1,42,500.00
Cash paid for salaries expenses				$ -34,000.00
Net cash flow from operating activities				$ 1,08,500.00
Cash flows from investing activities:				$                  -
Cash flows from financing activities:				$                  -
Net change in cash				$ 1,08,500.00
Beginning cash balance				$                  -
Ending cash balance				$ 1,08,500.00

Is this okay?