Exercise 7-4A Effect of recognizing uncollectible accounts expense on financial statements: percent of revenue allowance method LO 7-1 Rosie Dry Cleaning was started on January 1, Year 1. It experienced the following events during its first two years of operation: Events Affecting Year1 1. Provided $32,210 of cleaning services on account. 2. Collected $25,768 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 Year2 1. Wrote off a $242 account receivable that was determined to be uncollectible. 2. Provided $37,589 of cleaning services on account. 3. Collected $33,266 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 and Year 2 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 b for the Year 2 accounting period