Iowa Service Company was formed on January

Iowa Service Company was formed on January 1, 2016 and the following transactions occurred in 2016:

1. Acquired $60,000 cash from the issuance of common stock.
2. Purchased $1,200 of supplies on account.
3. Paid $800 cash towards the accounts payable in no. 2.
4. Recognized revenue on account of $42,000.
5. Paid $21,000 for other operating expenses.
6. Collected $38,000 cash from accounts receivable.

Adjusting entries in 2016

7. Recognized accrued salaries of $3,200 as of December 31, 2016.

8. Had $200 of supplies on hand as of December 31, 2016.

Transactions in 2017

1. Paid $3,200 cash to settle the salaries payable obligation.
2. Paid $3,600 cash in advance to lease office space.
3. Purchased $1,000 of supplies on account.
4. Provided services on account of $32,000.
5. Collected $33,000 cash from accounts receivable.
6. Paid a cash dividend of $5,000 to the shareholders.
7. Paid other operating expenses of $19,500.

Adjusting entries in 2017

8. The advanced payment for rental of the office space was made on March 1 for an one year term (Event 3).

9. Had $300 of supplies on hand as of December 31, 2017.

2016
Event Accounts
Cash
Receivable
1
60000
2
3
4
5
6
7
8
9
60000 Prepaid
Rent 0 Supplies 0 0
Assets Salaries
Revenue Expense Event Supplies
Expense Accounts
Payable = 0
60000
Other
Operating
Expenses Rent
Expense Salaries Payable 0
Liabilities+SE Net Income 1
2
3
4
5
6
7
8
9
0 0 0 0 0 0 Unearned
Revenue Retained
Common Stock Earnings Dividends
60000 0
60000 60000 0 Cash Flow
FA 0 2017
Event
Bal Cash Accounts
Receivable Prepaid
Rent Supplies = Accounts
Payable Salaries Payable 1
2
3
4
5
6
7
8
9 Assets Interest
Revenue Revenue Event
1
2
3
4
5
6
7
8
9 Salaries
Expense Supplies
Expense Liabilities+SE Rent
Expense Other
Operating
Expenses Unearned
Revenue Net Income Common Stock Retained
Earnings Dividends Cash Flow