Cheel Problem 1-20A Accounting for uncollectible accounts: percent of receivables allowance method LO 1-2, 7-3 [The following information applies to the questions displayed below.) Roth Inc experienced the following transactions for Year 1, its first year of operations: 1. Issued common stock for $80,000 cash. 2. Purchased $230,000 of merchandise on account. 3. Sold merchandise that cost $150,000 for $298.000 on account, 4. Collected $248,000 cash from accounts receivable. 5. Paid $215,000 on accounts payable. 6. Paid $64,000 of salaries expense for the year. 7 Paid other operating expenses of $53,000 8. Roth adjusted the accounts using the following information from an accounts receivable aging schedule: Number of Days Past Due Current 0-30 31-60 61-90 Over 90 days Allowance Balance Amount $30,000 12,500 2,500 2,500 2,500 Percent likely to Be Uncollectible 0.01 0.05 0.10 @.20 0.50 Problem 7-20A Part b b. Prepare the income statement, statement of changes in stockholders' equity, balance sheet, and statement of cash flows for Roth Inc. for Year 1. (Statement of Cash Flows and Balance Sheet only: Items to be deducted must be indicated with a minus sign.) ROTH, INC. Income Statement For the Year Ended Year 1 Sales revenue Cost of goods sold $ 298,000 150,000 148,000 Operating expenses Salaries expense Operating expenses Uncollectible accounts expense s 64,000 53,000 2.925 Total operating expenses Net income 119.925 $28.075