d-1. Prepare an Income statement for Year 1. Answer is not complete. COLTON ENTERPRISES Income Statement For the Year Ended December 31, Year 1 Service revenue $ 76,000 Expenses Operating expenses $ 36,000 Rent expense 9,150 Salaries expense 25,800 Total expenses 70,950 $ 5,050 Colton Enterprises experienced the following events for Year 1, the first year of operation: 1. Acquired $37,000 cash from the issue of common stock. 2. Paid $12,200 cash in advance for rent. The payment was for the period April 1, Year 1, to March 31, Year 2 3. Performed services for customers on account for $76,000. 4. Incurred operating expenses on account of $36.000. 5. Collected $58,500 cash from accounts receivable. 6. Pald $23,000 cash for salary expense. 7. Paid $28,800 cash as a partial payment on accounts payable. Adjusting Entries 8. Made the adjusting entry for the expired rent. (See Event 2.) 9. Recorded $2,800 of accrued salaries at the end of Year 1. Events for Year 2 1. Paid $2,800 cash for the salaries accrued at the end of the prior accounting period. 2. Performed services for cash of $25,000. 3. Purchased $3,000 of supplies on account. 4. Paid $11,100 cash in advance for rent. The payment was for one year beginning April 1, Year 2. 5. Performed services for customers on account for $92,000. 6. Incurred operating expenses on account of $43,500. 7. Collected $91,000 cash from accounts receivable. 8. Paid $41,000 cash as a partial payment on accounts payable. 9. Paid $31,700 cash for salary expense. 10. Paid a $11,000 cash dividend to stockholders. Adjusting Entries 11. Made the adjusting entry for the expired rent. (Hint Part of the rent was paid in Year 1.) 12. Recorded supplies expense. A physical count showed that $550 of supplies were still on hand.