Events affecting Year 1: 1. Provided $46,000 of services on account.

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Presentation transcript:

Events affecting Year 1: 1. Provided $46,000 of services on account. Scarlett Consultancy 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 $46,000 of services on account. 2. Collected $30,000 cash from accounts receivable. 3. Paid salaries of $15,000 for the year. 4. Adjusted the accounts to reflect management’s expectations that uncollectible accounts expense would be $1,200. Required a. Prepare general journal entries for the above events. b. Post the general journal entries to T-accounts. c. Prepare an income statement, balance sheet, and statement of cash flows for Year 1. In this exercise, we will prepare the general journal entries and post them to T-accounts. We will also prepare an income statement, balance sheet, and statement of cash flows for Year 1.