Reference no: EM131371510

Accounting problem

Green Services was founded on January 2 and offers various technology services. During the first quarter of operations, the following events occurred:

a. In January, Green provided and billed clients for $42,000 of consulting services. Clients paid for these services in March.

b. In January, Green collected $25,000 from clients for services provided during the month.

c. In February, Green provided and billed clients for $45,000 of consulting services. Green collected $12,000 in February and the remaining amount in March.

d. In March, Green Collected $34,000 from clients for services provided during the month and billed clients an additional $21,000 for services provided.

e. Green pays employees at the end of each month for services provided. Monthly payroll was $12,000, $13,000 and $15,000 in January, February and March respectively.

f. Green pays it utiity bills at the end of each month. Utilities bills totaled $800, $850 and $1,000 in January, February and March respectively.

g. Green hired an independent contractor who provided $1,200 of services in February. The contractor was paid in March.

Required:

1. Provide journal entries to record the transactions using the accrual method of accounting.

2. Determine Green's net income for the first quarter using the accrual method of accounting.

3. Prepare Green's Balance Sheet for the First Quarter.

4. Assuming March 31 is Green's year-end, prepare March 31 closing entries.

5. Prepare Green's March 31 statement of Retained Earnings.

6. Prepare Green's Statement March 31 statement of Cash Flows using the indirect method.