The following data were selected from the records of Tunga Company for they year ended December 31, 2012.

The company sells merchandise for cash and on open account with credit terms \(2 / 10, \mathrm{n} / 30\). Assume a unit sales price of \(\$ 500\) in all transactions, and use the gross method to record sales revenue.
Transactions during 2012:

a. Sold merchandise for cash, \(\$ 236,000\).

b. Sold merchandise to R. Agostino on open account for \(\$ 11,000\).

c. Sold merchandise to K. Black on open account for \(\$ 30,000\).

d. Two days after purchase, R. Agostino returned one of the units purchased in

(b) and received account credit.

e. Sold merchandise to B. Assaf on open account for \(\$ 22,000\).

f. R. Agostino paid his account in full within the discount period.
g. Collected \(\$ 98,000\) cash from customers for credit sales made in 2012, all within the discount periods.
h. K. Black paid the invoice in

(c) within the discount period.
i. Sold merchandise to R. Fong on open account for \(\$ 17,000\).
\(j\). Three days after paying the account in full, K. Black returned seven defective units and received a cash refund.
k. Collected \(\$ 8,000\) cash on a trade receivable for sales made in 2011. The amount was received after the discount period.
l. Wrote off an old account of \(\$ 2,900\) after deciding that the amount would never be collected.
m. The estimated bad debt rate used by the company was 1 percent of net credit sales.
Required:
1. Using the following categories, indicate the dollar effect (+ for increase, - for decrease, and NE for no effect) of each listed transaction, including the write-off of the uncollectible account and the adjusting entry for estimated bad debts (ignore cost of sales). The effects of the first transaction are shown as an example:

2. Show how the accounts related to the preceding sale and collection activities should be reported on the income statement for 2012. (Treat sales discounts as contra revenues.)

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Belances January 1, 2012 Trade receivables (varicus customers) $110.000 Allowance for doubtful accounts 5,000