Brief Exercise $7-2($Algo$)$ Effect of recognizing uncollectible accounts on the financial statements: percent of receivables allowance method $L07-2$

Fun in the Sun Incorporated operates a beach chalr rental service in south Florida. The company experienced the following events in its first year of operations:

Issued $$112,000$ of common stock for cash.

$2$ Provided $$82,000$ of rental services on account.

Collected $$38,800$ cash from accounts recelvable.

Adjusted the accounting records to reflect uncollectible accounts expense for the year. Leach estimates that $10$ percent of the ending accounts receivable balance will be uncollectible.

Required:

Use a horizontal financial statements model to show how each event affects the balance sheet. Income statement, and statement of cash flows. More specifically, record the amounts of the events into the model. The first transaction is shown as an example.

Note: In the Cosh Flow column, use OA to designate operating activity, IA for investment octivity, FA for financing activity, and NC for net change in cash. Enter any decreases to account balances and cash outilows with a minus sign. Not all cells require an input $-$ leave cells blank if there is no corresponding input needed.

$\backslash$table$[[$Event$,$Balance Sheet,Income Statemont,$\{$

$\backslash$table$[[$Statement of Cash$],[$Flows$]]\}],[$Assets$,\backslash$table$[[-],[-]],\backslash$table$[[$Liabilitios$],[\backslash$table$[[$Accounts$],[$Payablo$]]]],+,$Stockholders' Equity,Revonue,Expenses,$-{?}^{\text{N}\text{e}\text{t}}$ Ineome$],[$Cash$,-,\backslash$table$[[$Net$],[$Realizable$],[$Value of$],[$Accounts$],[$Receivable$]],\backslash$table$[[$Common$],[$Stock$]],+,\backslash$table$[[$Retained$],[$Earnings$]]],[1.,112\mathrm{.}000,+,,=,,+,112,000,+,,,-,,,,112,000,$FA$],[2,,+,,=,,+,,+,,,,$DIIII,$=,,$MAMI,$],[3,,+,,=,,+,,+,,,1-,,=,$Minin,minn.,$[1]],[4,,+,,=,,+,,+,,,1-,,,$DInind,,$],[$Total$,112\mathrm{.}000,].,0,=,0,1+,112,000,+,0,0,,\backslash$table$[[0$