Exercise 7-8A (Algo) Accounting for uncollectible accounts: percent of receivables allowance method LO 7-2, 7-3

Vulcan Service Company experienced the following transactions for Year 1, its first year of operations:

1. Provided $70,000 of services on account.
2. Collected $42,000 cash from accounts receivable.
3. Paid $28,000 of salaries expense for the year.
4. Adjusted the accounts using the following information from an accounts receivable aging schedule:

Number of Days Past Due	Amount	Percent Likely to Be Uncollectible	Allowance Balance
Current	$20,720	0.01
0 to 30	1,400	0.05
31 to 60	1,960	0.10
61 to 90	1,680	0.30
Over 90 days	2,240	0.50

Required

1. Record the given transactions in general journal form and post to T-accounts.
2. Prepare the income statement for Vulcan Service Company for Year 1.
3. What is the net realizable value of the accounts receivable at December 31, Year 1? .