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e-1. Prepare closing entries and post these closing entries to the T-accounts and prepare a post-closing trial balance for Year 1 and Year 2. [The
e-1.Prepare closing entries and post these closing entries to the T-accounts and prepare a post-closing trial balance for Year 1 and Year 2.
[The following information applies to the questions displayed below.] The following transactions apply to Jova Company for Year 1, the first year of operation:
- Issued $10,000 of common stock for cash.
- Recognized $210,000 of service revenue earned on account.
- Collected $162,000 from accounts receivable.
- Paid $125,000 cash for operating expenses.
- Adjusted the accounts to recognize uncollectible accounts expense. Jova uses the allowance method of accounting for uncollectible accounts and estimates that uncollectible accounts expense will be 1 percent of sales on account.
The following transactions apply to Jova for Year 2:
- Recognized $320,000 of service revenue on account.
- Collected $335,000 from accounts receivable.
- Determined that $2,150 of the accounts receivable were uncollectible and wrote them off.
- Collected $800 of an account that had previously been written off.
- Paid $205,000 cash for operating expenses.
- Adjusted the accounts to recognize uncollectible accounts expense for Year 2. Jova estimates uncollectible accounts expense will be 0.5 percent of sales on account.
Complete the following requirements for Year 1 and Year 2. Complete all requirements for Year 1 prior to beginning the requirements for Year 2.
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