Exercise 7.9A (Algo) Accounting for uncollectible accounts: direct write-off method LO 7.4 Patel Service Company does make a few sales on account but is mostly a cash business, Consequently, it uses the direct write-off method to occount for uncollectlole accounts. During Yoor 1, Patel Service Company earned $33,550 of cash revenue and 58,388 of revenue on account. Cash operating expenses were $20,939. After numerous attempts to coliect a $242 account receivable from Sam Stephens, the account was determined to be uncollectible in Year 1. Requiredt a. Show the effects of (7) cash revenue, (2) revenue on account, (3) cash expenses, and (4) write off of the uncoliectible account on the financiel statements using a horizontal statements model. In the Statement of Cash Flows column, indicate whether the item is an operating activity (OA), investing activity (IA), or firancing activity (FA). b. What amount of net income did Patel Service Company report on the Year 1 income statement? Complete this question by entering your answers in the tabs below. Show the effects of (1) cash revenue, (2) revenue on account, (3) cash expenses, and (4) write off of the uncollectible account on the firancal statements using a harter statements model. Note: Enter amy decreases to account baiances and cash outfows wath a minus sign. For changes on the Statement of Cash Flows, indicate whether the iten it an operahil (OA), investing activity (tA), or financing activity (FA), Not all cells require input. Complete this question by entering your answers in the tabs below. Show the effects of (1) cash revenue, (2) revenue on account, (3) cash expenses, and (4) write off of the uncollectible account an the finarcial statements using a hortzor statements model. Note: Enter any decreases to account balances and cash outflows with a minus sign, For changes on the Statement of Cash Flows, indicate whether the item is an ooeratii (OA), investing sctivity (IA), or financing activity (FA). Not all cells require input. Exercise 7-9A (Algo) Accounting for uncollectible accounts: direct write-off method LO 7-4 Patel Service Company does make a few sales on account but is mostly a cash business. Consequently, it uses the direct write-off method to account for uncollectible accounts. During Year 1, Patel Service Company earned $33,550 of cash revenue and $8,388 of revenue on account. Cash operating expenses were $20,939. After numerous attempts to collect a $242 account receivable from Sam Stephens, the account was determined to be uncollectible in Year 1. Required: a. Show the effects of (1) cash revenue, (2) revenue on account, (3) cash expenses, and (4) write off of the uncollectible account on the financial statements using a horizontal syatements model. In the Statement of Cash Flows column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). b. What amount of net income did Patel Service Company report on the Year 1 income statement? Complete this question by entering your answers in the tabs below. What amount of net income did Patel Service Company report on the Year 1 income statement
