**Alcorn Service Company Financial Overview****Foundation and Initial Events – Year 1:**- Alcorn Service Company was established on January 1, Year 1.**Events Impacting Year 1 Accounting Period:**1. Issued common stock for $64,000 in cash.2. Purchased $2,000 of supplies on account.3. Acquired land costing $26,000 in cash.4. Settled accounts payable from Event 2, paying $2,000 in cash.5. Earned $50,000 in revenue on account.6. Incurred $25,000 in other operating expenses paid in cash.7. Collected $42,000 cash from accounts receivable.**Year 1 Adjusting Entries:**8. Recognized $3,600 in accrued salaries as of December 31, Year 1.9. $600 worth of supplies remained at the end of the accounting period.**Events Impacting Year 2 Accounting Period:**1. Issued common stock for $24,000 in cash.2. Paid $3,600 cash to settle salaries payable.3. Paid $4,800 cash in advance for leasing office space.4. Sold land bought for $26,000, receiving $26,000 in cash.5. Obtained $6,000 cash for services to be performed later.6. Acquired $1,400 of supplies on account during the year.7. Earned $36,000 in service revenue on account.8. Collected $37,000 cash from accounts receivable.9. Paid $9,000 cash dividend to stockholders.10. Incurred $23,500 in other operating expenses paid in cash.**Year 2 Adjusting Entries:**11. The advance office space payment (Event 3) was for a one-year term starting March 1.12. The cash advance for future services was collected on October 1 (Event 5).13. Supplies worth $700 were remaining at the end of the period.14. Recognized $4,300 in accrued salaries.15. Recognized $800 of accrued interest revenue.**Tasks for Financial Reporting:**- Prepare income statements for Year 1 and Year 2.- Prepare statements of changes in stockholders’ equity for Year 1 and Year 2.- Prepare balance sheets for Year 1 and Year 2.- Prepare cash

Financial Statements include Income Statement, Statement of Stockholder's Equity, Balance Sheet and…

Alcorn Service Company was formed on January 1. Year 1. Events Affecting the Year 1 Accounting Period 1. Acquired $64,000 cash from the issue of common stock. 2. Purchased $2,000 of supplies on account. 3. Purchased land that cost $26,000 cash. 4. Paid $2,000 cash to settle accounts payable created in Event 2. 5. Recognized revenue on account of $50,000. 6. Paid $25,000 cash for other operating expenses. 7. Collected $42,000 cash from accounts receivable. Information for Year 1 Adjusting Entries 8. Recognized accrued salaries of $3,600 on December 31, Year 1. 9. Had $600 of supplies on hand at the end of the accounting period. Events Affecting the Year 2 Accounting Period 1. Acquired $24,000 cash from the issue of common stock. 2. Paid $3,600 cash to settle the salaries payable obligation. 3. Paid $4,800 cash in advance to lease office space. 4. Sold the land that cost $26,000 for $26,000 cash. 5. Received $6,000 cash in advance for services to be performed in the future. 6. Purchased $1,400 of supplies on account during the year. 7. Provided services on account of $36,000. 8. Collected $37,000 cash from accounts receivable. 9. Paid a cash dividend of $9,000 to the stockholders. 10. Paid other operating expenses of $23,500. Information for Year 2 Adjusting Entries 11. The advance payment for rental of the office space (see Event 3) was made on March 1 for a one-year term. 12. The cash advance for services to be provided in the future was collected on October 1 (see Event 5). The one- year contract started on October 1. 13. Had $700 of supplies remaining on hand at the end of the period. 14. Recognized accrued salaries of $4,300 at the end of the accounting period. 15. Recognized $800 of accrued interest revenue. Prepare an income statement for Year 1 and Year 2. Prepare the statement of changes in stockholders' equity for Year 1 and Year 2. Prepare the balance sheet for Year 1 and Year 2. Prepare the statement of cash flows for Year 1 and Year 2, using the vertical statements model.