Reference no: EM132983659

Alcorn Service Company was formed on January 1, 2018.

Events Affecting the 2018 Accounting Period

1. Acquired $65,000 cash from the issue of common stock.
2. Purchased $2,200 of supplies on account.
3. Purchased land that cost $28,000 cash.
4. Paid $2,200 cash to settle accounts payable created in Event 2.
5. Recognized revenue on account of $52,000.
6. Paid $26,000 cash for other operating expenses.
7. Collected $43,000 cash from accounts receivable.

Information for 2018 Adjusting Entries

1. Recognized accrued salaries of $3,700 on December 31, 2018.
2. Had $700 of supplies on hand at the end of the accounting period.

Events Affecting the 2019 Accounting Period

1. Acquired $25,000 cash from the issue of common stock.
2. Paid $3,700 cash to settle the salaries payable obligation.
3. Paid $5,100 cash in advance to lease office space.
4. Sold the land that cost $28,000 for $28,000 cash.
5. Received $6,300 cash in advance for services to be performed in the future.
6. Purchased $1,500 of supplies on account during the year.
7. Provided services on account of $37,000.
8. Collected $38,000 cash from accounts receivable.
9. Paid a cash dividend of $4,000 to the stockholders.
10. Paid other operating expenses of $24,500.

Information for 2019 Adjusting Entries

1. The advance payment for rental of the office space (see Event 3) was made on March 1 for a one-year term.
2. 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.
3. Had $800 of supplies remaining on hand at the end of the period.
4. Recognized accrued salaries of $4,400 at the end of the accounting period.
5. Recognized $900 of accrued interest revenue.

Problem 1: Prepare an income statement for 2018 and 2019.

Problem 2: Prepare the statement of changes in stockholders' equity for 2018 and 2019.

Problem 3: Prepare the balance sheet for 2018 and 2019.

Problem 4: Prepare the statement of cash flows for 2018 and 2019, using the vertical statements model.