Exercise 7-4A Effect of recognizing uncollectible accounts expense on financial statements: percent of revenue allowance method Rosie Dry Cleaning was started on January 1, Year 1. It experienced the following events during its first two years of operation: Events Affecting Year 1 1. Provided $45,000 of cleaning services on account 2. Collected $39,000 cash from accounts receivable 3. Adjusted the accounting records to reflect the estimate that uncollectible accounts expense would be 1 percent of the cleaning revenue on account Events Affecting Year 2 1. Wrote off a $300 account receivable that was determined to be uncollectible. 2. Provided $62,000 of cleaning services on account 3. Collected $61,000 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 a. Record the events for Year 1 in T-accounts b. Determine the following amounts: (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 c. Repeat Requirements a and b for the Year 2 accounting period