Required information Problem 7-17A (Algo) Accounting for uncollectible accounts: two cycles using the percent of revenue allowance method LO 7-1 (The following information applies to the questions displayed below.) The following transactions apply to Jova Company for Year 1, the first year of operation: 1. Issued $13,500 of common stock for cash. 2. Recognized $68,500 of service revenue earned on account. 3. Collected $60,800 from accounts receivable. 4. Paid operating expenses of $35,600. 5. Adjusted accounts to recognize uncollectible accounts expense. Jova uses the allowance method of accounting for uncollectible accounts and estimates that uncollectible accounts expense will be 2 percent of sales on account. The following transactions apply to Jova for Year 2: 1. Recognized $76,000 of service revenue on account. 2. Collected $68,800 from accounts receivable. 3. Determined that $970 of the accounts receivable were uncollectible and wrote them off. 4. Collected $200 of an account that had previously been written off. 5. Paid $49,200 cash for operating expenses. 6. Adjusted the accounts to recognize uncollectible accounts expense for Year 2. Jova estimates uncollectible accounts expense will be 1 percent of sales on account. Required Complete the following requirements for Year 1 and Year 2. Complete all requirements for Year 1 prior to beginning the requirements for Year 2. Problem 7-17A (Algo) Part d-1 d-1. Prepare the income statement, statement of changes in stockholders' equity, balance sheet, and statement of cash flows for Year 1. Complete this question by entering your answers in the tabs below. Reg D1 Income Stmt Reg D1 Stmt of Changes Reg Di Reg Di Stmt Balance Sheet of Cash Flows Prepare an income statement for Year 1. Financial Statements Income Statement For the Year Ended Year 1 Expenses Total expenses D1 Income Stmt Reg D1 Stmt of Changes > Net income Net loss Cost of goods sold Operating expenses Salaries payable Service revenue Uncollectible accounts expense Problem 7-17A (Algo) Part d-1 d-1. Prepare the income statement, statement of changes in stockholders' equity, balance sheet, and statement of cash flows for Year 1. Complete this question by entering your answers in the tabs below. Req D1 Reg D1 Stmt Reg Di Reg Di Stmt Income Stmt of Changes Balance sheet of Cash Flows Prepare the statement of changes in stockholders' equity for Year 1. JOVA COMPANY Statement of Changes in Stockholders' Equity For the Year Ended Year 1 Beginning common stock $ 0 Ending common stock Beginning retained earnings Sentained annan 0 0 Plus: Net income Reg D1 Income Stmt Req D1 Balance Sheet > Less: Net loss Problem 7-17A (Algo) Part d-1 d-1. Prepare the income statement, statement of changes in stockholders' equity, balance sheet, and statement of cash flows for Year 1. Complete this question by entering your answers in the tabs below. Req D1 Req Di Stmt Req D1 Req D1 Stmt Income Stmt of Changes Balance Sheet of Cash Flows Prepare the balance sheet for Year 1. JOVA COMPANY Balance Sheet As of December 31, Year 1 Assets 0 Total assets $ 0 Liabilities Stockholders' equity Tatotockholdersuit 0 $ 0 Accounts payable Accounts receivable mt of Changes Req D1 Stmt of Cash Flows > Cash Common stock Retained earnings Problem 7-17A (Algo) Part d-1 d-1. Prepare the income statement, statement of changes in stockholders' equity, balance sheet, and statement of cash flows for Year 1. Complete this question by entering your answers in the tabs below. Reg D1 Income Stmt Req D1 Stmt Req D1 Reg D1 Stmt of Changes Balance sheet of Cash Flows Prepare the statement of cash flows for Year 1. (Amounts to be deducted should be indicated with a minus sign.) JOVA COMPANY Statement of Cash Flows For the Year Ended Year 1 Cash flows from operating activities: $ 0 Net cash flow from operating activities Cash flows from investing activities Cash flows from financing activities $ 0 Net cash flow from financing activities Net change in cash 0 Em v nh hai con $ 0 alance Sheet Reg D1 Stmt of Cash Flows > Plus: Beginning cash balance Less: Beginning cash balance Inflow from customers Inflow from issue of Common Stock Outflow for expenses Outflow for inventory Outflow for rent
