12.6

Rosie Dry Cleaning was started on January 1, Year 1. It experienced the following events during its first two years of operation: Events Affecting Year 1 1. Provided $27,020 of cleaning services on account. 2. Collected $21,616 cash from accounts receivable. 3. Adjusted the accounting records to reflect the estimate that uncollectible accounts expense would be 1 percent of the cleaning revenue on account. Events Affecting Year 2 1. Wrote off a $203 account receivable that was determined to be uncollectible. 2. Provided $31,532 of cleaning services on account. 3. Collected $27,906 cash from accounts receivable. 4. Adjusted the accounting records to reflect the estimate that uncollectible accounts expense would be 1 percent of the cleaning revenue on account. Required a. Organize the transaction data in accounts under an accounting equation for each year. b. Determine the following amounts: 1. (1) Net income for Year 1. 2. (2) Net cash flow from operating activities for Year 1. 3. (3) Balance of accounts receivable at the end of Year 1. 4. (4) Net realizable value of accounts receivable at the end of Year 1. c. Determine the following amounts: 1. (1) Net income for Year 2. 2. (2) Net cash flow from operating activities for Year 2. 3. (3) Balance of accounts receivable at the end of Year 2. 4. (4) Net realizable value of accounts receivable at the end of Year 2. Reg A1 Reg A2 Req B Reqc Organize the transaction data in accounts under an accounting equation for year 1. (Enter any decreases to account balances with a minus sign. If there is no effect on the Accounts Titles for Retained Earnings, leave the cell blank. Not all cells will require entry. Round your answers to the nearest whole dollar.) ROSIE DRY CLEANING Accounting Equation for the Year 1 Balance Sheet Assets Equity Accounts Titles for Retained Earnings NRV Accounts Retained + Receivable Earnings Event Cash 1. + 2. + 3. + + + Bal. + Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req B Reg c Organize the transaction data in accounts under an accounting equation for year 2. (Enter any decreases to account balances with a minus sign. If there is no effect on the Accounts Titles for Retained Earnings, leave the cell blank. Not all cells will require entry. Round your answers to the nearest whole dollar.) ROSIE DRY CLEANING Accounting Equation for the Year 2 Balance Sheet Assets Equity Accounts Titles for Retained Earnings NRV Accounts Retained + Receivable Earnings Event Cash Bal. + 1. | + 2. + 3. + 4. + Bal. + Complete this question by entering your answers in the tabs below. Req A1 Req A2 Reg B Reqc Determine the following amounts for the Year 1 accounting period. (Round your answers to nearest whole dollar amount.) Net income Net cash flow from operating activities Balance of accounts receivable Net realizable value of accounts receivable Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req B Reqc Determine the following amounts for the Year 2 accounting period. (Round your answers to nearest whole dollar amount.) Net income Net cash flow from operating activities Balance of accounts receivable Net realizable value of accounts receivable