A-1

Roth Incorporated experienced the following transactions for Year 1, its first year of operations:

1. Issued common stock for $80,000 cash.
2. Purchased $245,000 of merchandise on account.
3. Sold merchandise that cost $152,000 for $302,000 on account.
4. Collected $244,000 cash from accounts receivable.
5. Paid $230,000 on accounts payable.
6. Paid $48,000 of salaries expense for the year.
7. Paid other operating expenses of $37,000.
8. Roth adjusted the accounts using the following information from an accounts receivable aging schedule.

Number of Days Past Due	Amount	Percent Likely to Be Uncollectible	Allowance Balance
Current	$34,800	0.01
0 to 30	14,500	0.05
31 to 60	2,900	0.10
61 to 90	2,900	0.20
Over 90 days	2,900	0.50

c. What is the net realizable value of the accounts receivable on December 31, Year 1?

A-2

Events Affecting Year 2

1. Wrote off a $251 account receivable that was determined to be uncollectible.
2. Provided $39,118 of cleaning services on account.
3. Collected $34,619 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

1. Record the events for Year 1 and Year 2 (including closing entries for Year 1) in T-accou
2. .Determine the following amounts
3. 3 . 3.Repeat Requirement b for the Year 2 accounting period. 3.

Record the events for Year 1 and Year 2 (including closing entries for Year 1 ) in T-accounts. (Round your answers to nearest whole dollar.) \begin{tabular}{|l|l|l|l|} \hline \multicolumn{3}{|c|}{ Retained Earnings } \\ \hline Beg. Bal. & & & \\ \hline & & & \\ \hline & & & \\ \hline End. Bal. & & \\ \hline \end{tabular} \begin{tabular}{|l|l|l|} \hline \multicolumn{3}{|c|}{ Allowance for Doubtful Accounts } \\ \hline Year 1 & & \\ \hline & & \\ \hline \end{tabular} \begin{tabular}{|l|l|l|} \hline \multicolumn{4}{|c|}{ Uncollectible Accounts Expense } \\ \hline Year 1 & & \\ \hline & & \\ \hline \end{tabular} Determine the following amounts: (Round your intermediate calculations to nearest whole dollar.) (1) Net income for Year 1. (2) Net cash flow from operating activities for Year 1. (3) Balance of accounts receivable at the end of Year 1. (4) Net realizable value of accounts receivable at the end of Year 1. Repeat Requirement b for the Year 2 accounting period. (Round your intermediate calculations to nearest whole dollar.) \begin{tabular}{l|l|l|} (1) & Net income for Year 2 \\ (2) & Net cash flow from operating activities for Year 2 & \\ (3) & Balance of accounts receivable at the end of Year 2 \\ \hline (4) & Net realizable value of accounts receivable at the end of Year 2 & \\ \hline \end{tabular}