Holmes Cleaning Service began operation on January 1, 2016. The company experien

Question

Holmes Cleaning Service began operation on January 1, 2016. The company experienced the following events for its first year of operations:

           

Adjusted the accounts to reflect management’s expectations that uncollectible accounts expense would be $1,400. The expense was determined using the percent of revenue method.

Prepare an income statement, balance sheet, and statement of cash flows for 2016.

Holmes Cleaning Service began operation on January 1, 2016. The company experienced the following events for its first year of operations:

Explanation / Answer

Working Note 1- Worksheet for Horizontal statement Model

Working Note 2: Ledger of Retained earnings

Step 1 - Income Statement

Step 2 - Balance sheet

Step 3 - Cash Flow Statement

Number Transaction Cash (Assets) + Accounts receivable (Assets) - Allowance for uncollectible accounts = Retained Earnings (Equity) 1 Revenue on providing cleaning services $140000 $140000 2 Collection from receivables $105000 ($105000) 3 Paid salaries ($24000) ($24000) 4 Uncollectible accounts $1400 ($1400) Balance $81000 + $35000 - $1400 = $114600

Related Questions

Navigate

• Browse (All)
• Browse H
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.