Magoo Taboo makes unique childrens toys that have created an absolute frenzy during the holiday shopping season. The 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, the company experienced the following events: Magoo Kaboo earned $18,400 of cash revenue and $6,200 of revenue on account. Cash operating expenses were $7,200. After numerous attempts to collect a $82 account receivable from a customer, the account was determined to be uncollectible in Year 1.

Required: Use a horizontal financial statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. More specifically, record record the amounts of the events into the model.

Note: In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, and NC for net change in cash. Enter any decreases to account balances and cash outflows with a minus sign. Not all cells require an input - leave cells blank if there is no corresponding input needed.