Holmes Cleaning Service began operation on January 1, 2016. The company experienced the following events for its first year of operations:
Events Affecting 2016:
1. Provided $84,000 of cleaning services on account.
2. Collected $76,000 cash from accounts receivable.
3. Paid salaries of $28,500 for the year.
4. Adjusted the accounts to reflect management’s expectations that uncollectible accounts expense would be $1,650. The expense was determined using the percent of revenue method.
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 2016.