Spit-Spot Cleaners,Inc.,recognized the following events related to customer accounts receivable during the firm’s first year of operation: 1. Sales on credit totaled $4,000,000 for the year. 2. The firm estimated that 2% of its credit sales would ultimately prove to be uncollectible. 3. Cash collections of accounts receivable totaled $3,480,000 during the year. 4. The firm wrote off uncollectible accounts of $75,000.

Required

a. Determine the effects of each of these events on the following financial statement items:
• Accounts receivable (net of allowance)
• Total assets • Revenues • Expenses

b. Determine the firm’s balance of accounts receivable (net) at December 31 (year-end). E-967