Reliable Auto Service was started on January 1, 2016. The company experienced the following events during its first two years of operation:

Events Affecting 2016

1-Provided $45,000 of repair services on account.

2-Cllected $32,000 cash from accounts receivable.

3-Adjusted the accouting records to reflect the estimate that uncollectible accounts expense would be 1 percent of the service revenue on account.

Events Affecting 2017

Wrote off a $320 account receivable that was determined to be uncollectible.

1-Provided $65,000 of repair services on account.

2-Collected $66,000 cash from accounts receivable.

3-Adjusted the accouting records to reflect the estimate that uncollectible accounts expense would be 1 percent of the aservice revenue on account.

Required

a-Record the events for 2016 in general journal form and post them to T-accounts.

b- Determine the following amounts:

1-Net income for 2016.

2-Net cash flow from operating activities for 2016.

3-Balance of accounts receivable at the end of 2016.

4-Net realizable value of accounts receivable at the end of 2016.

c-Repet Requirements a and b for the 2017 accounting period.

a. and c.

Reliable Auto Service General Journal
Date	Account Titles	Debit	Credit
2016
1.
2.
3.
4. cl
5. cl
2017
1.
2.
3.
4.

3. a. & c. (cont.)

Reliable Auto Service T-Accounts

Assets

=

Liabilities

+

Stockholders Equity

Cash

Retained Earnings

2016

2016

Bal.

Bal.

2017

Service Revenue

Bal.

2016

Accounts Receivable

Bal.

2016

2017

Bal.

Bal.

2017

Uncoll. Accts. Expense

2016

Bal.

Bal.

Allow. For Doubt. Accts.

2017

2016

Bal.

Bal.

2017

Bal.

Note: Closing entries for 2017 do have to be made because they are not necessary to answer the questions.

b. (1) Net Income for 2016:

(2) Net Cash Flow from Operating Activities:

(3) Balance of Accounts Receivable, 12/31/2016:

(4) Net Realizable Value of Accounts Receivable:

c. (1) Net Income for 2017:

(2) Net Cash Flow from Operating Activities:

(3) Balance of Accounts Receivable, 12/31/2017:

(4) Net Realizable Value of Accounts Receivable: