Exercise 7-5A (Algo) Analyzing financial statement effects of accounting for uncollectible accounts using the percent of revenue allowance method LO 7-1 Grover incorporated uses the allowance method to account for uncollectible accounts expense. Grover Incorporated experienced the following four accounting events in Year 1 : 1. Recognizd $79,000 of revenue on account. 2. Collected $73,000 cash from accounts receivable. 3. Wrote off uncollectible accounts of $1,050. 4. Recognized uncollectible accounts expense. Grover estimated that uncollectible accounts expense will be 3 percent of sales on account. Required: a. Show the effect of each event on the elements of the financial statements, using a horizontal statements model like the one shown next. The first transaction is entered as an example. Note: Use + for increase, - for decrease, or +/- for increase and decrease. In the Statement of Cash Flows column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). Not all cells will require input. Exercise 7-12A (Algo) Notes receivable-accrued interest LO 7-5 On May 1, Year 1, Benz's Sandwich Shop loaned $14,000 to Mark Henry for one year at 10 percent interest. Required: a. What is Benz's interest income for Year 1? b. What is Benz's total amount of receivables at December 31, Year 1 ? c. How will the loan and interest be reported on Benz's Year 1 statement of cash flows? d. What is Benz's interest income for Year 2? e. What is the total amount of cash that Benz's will collect in Year 2 from Mark Henry? f. How will the loan and interest be reported on Benz's Year 2 statement of cash flows? g. What is the total amount of interest that Benz's earned on the loan to Mark Henry? Note: For all requirements, round your answers to the nearest dollar amount