Patel Service Co. 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 Co. earned $30,400 of cash revenue and $7,600 of revenue on account. Cash operating expenses were $22,324. After numerous attempts to collect a $268 account receivable from Sam Stephens, the account was determined to be uncollectible in Year 1. Required: b. What amount of net income did Patel Service Co. report on the Year 1 income statement? c. Prepare the general journal entries for the four accounting events listed in Requirement a.

What amount of net income did Patel Service Co. report on the Year 1 income statement?

Net income

Prepare the general journal entries for the four accounting events listed in Requirement a. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Journal entry worksheet

Record A-B on separate journal entries

• A. Record cash received for service revenue.
• B. Record services on account.
• C. Record cash paid for operating expenses.
• D. Record entry for uncollectible accounts expenses.

Note: Enter debits before credits.

Transaction	General Journal	Debit	Credit
1