During the first year of operations, the company recognized revenues for $220,000 for services performed on account, and estimated the 3% of sales will be uncollected. The ending balance of the Accounts Receivable account was $45,000. (4 points) 7. Determine the amount of sales that was collected on cash a) Service Revenue $220,000-$45,000 = cash sales $175,000 b) Service Revenue $220,000 -($220,000 x 3%) = cash sales $213,400 c) Service Revenue $220,000-$175,000 = cash sales $45,000 (4 points) & Determine the amount of Uncollectible Account Expense a) $175,000 b) 56.600 d) $213.400 You MUST show your calculations The company uses the Allowance Method of Accounting for Uncollectible Accounts, and has the following data Accounts Receivable 566,000 Collections of Accounts Receivable $58,000 Estimate of Uncollectible Account 1% (4 points) 9. Determine the Accounts Receivable balance at the end of the accounting period. a) $66,000 - $58,000 $8,000 b) $66,000 - 1566,000 x 1) - 565,340 c) 566,000 x 1% 5660 (4 points) 10. How the collectible Account s will affect the accounting equation Financial Statements horizontal? a) Increase Allowance for Uncollectible Account and decrease Retained Earnings by $660 Increase Uncollectible Account Expense and decrease Net Income by 5660 The cash flow will be affected by $660 outflow b) Increase Allowance for Uncollectible Account and decrease Retained Earnings by $660 Increase Uncollectible Account Expense and decrease Net Income by 5660 The cash flow will not be affected by S660 outflow c) Increase Allowance for Uncollectible Account and increase Retained Earnings by S660 Increase Sales Revenue and increase Net Income by $660. The cash flow will be affected by S660 outflow (4 points) 11. After multiple actions trying to collect some accounts, the company rate of $320 of uncollectible accounts receivables. How this event will affect the accounting equation Financial Statements horizontal)? a) Decrease Accounts Receivable and decrease Retained Earnings by $300 Increase Uncollectible Account Expense and increase Net Income by $300 The cash flow will be affected by $330 outflow. b) Decrease Accounts Receivable and decrease Allowance for Uncolectible Account by $300 The cash flow will be affected by $330 outflow Decrease Accounts Receivable and decrease Allowance for Uncollectible Account by $300 The cash flow will not be affected by $330 outflow. (4 points) 12. The company recovered $50 of a receivable that was previously written oft How this event will affect the accounting equation (Financial Statements-horizontal)? a) Increase Account Receivable and increase Allowance for Uncollectible Account by 550 Increase Cash and decrease Account Receivable by S50 The cash flow will be affected by S50 inflow b) Decrease Account Receivable and decrease Allowance for Uncollectible Account by 550 Increase Cash and decrease Account Receivable by SSO The cash flow will be affected by S50 inflow c) Increase Cash and decrease Account Receivable by 550. The cash flow will be affected by SSO inflow