3 10 points During the first year of operation, Year 1, Direct Service Co. recognized $350,000 of service revenue on account. At the end of Year 1, the accounts receivable balance was $63,000. For this first year in business, the owner believes uncollectible accounts expense will be about 3 percent of sales on account Required a. What amount of cash did Direct Service collect from accounts receivable during Year 1? b. Assuming Direct Service uses the allowance method to account for uncollectible accounts, what amount should Direct Service record as uncollectible accounts expense for Year 1? c. What is the net realizable value of receivables at the end of Year 1? d. Show the effects of the given transactions on the financial statements by recording the appropriate amounts in a horizontal statements model like the one shown here. In the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). For events that have no effect, leave the cell blank. eBook Print References Complete this question by entering your answers in the tabs below. Reg A to Reg D What amount of cash did Direct Service collect from accounts receivable during Year 12 Assuming Direct Service uses the allowance method to account for uncollectible accounts, what amount should Direct Service record as uncollectible accounts expense for Year 17 What is the net realizable value of receivables at the end of Year 1? Show less Collections of accounts receivable b. Uncollectible accounts expenso Netreble value RegD> a. What amount of cash did Direct Service collect from accounts receivable during Year 1? b. Assuming Direct Service uses the allowance method to account for uncollectible accounts, what amount should Direct Service record as uncollectible accounts expense for Year 1? c. What is the net realizable value of receivables at the end of Year 12 d. Show the effects of the given transactions on the financial statements by recording the appropriate amounts in a horizontal statements model like the one shown here. In the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). For events that have no effect, leave the cell blank. Complete this question by entering your answers in the tabs below. Reg A to ReqD Show the effects of the given transactions on the financial statements by recording the appropriate amounts in a horizontal statements model like the ones indicate whether the item is an operating activity (OA), Investing activity (IA), or financing activity (FA). For events that have no effect, leave the cell blank Enter any decreases to account balances and cash outflows with a minus sign.) DIRECT SERVICE CO. Horizontal Statements Model Assets Income Statement Equity Liabilities Cash NRV Accounts Receivable Statement of Cash Flow Retained Revonuo Not Income Expense 1. Sales 2. Cash Collected 3. Uncollectible Accounts Total + Req Atoc
