1. 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.