Required Information [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 $10,000 of common stock for cash. 2. Recognized $210,000 of service revenue earned on account. 3. Collected $162,000 from accounts receivable. 4. Pald operating expenses of $125,000. 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 1 percent of sales on account. The following transactions apply to Jova for Year 2: 1. Recognized $320,000 of service revenue on account 2. Collected $335,000 from accounts recelvable. 3. Determined that $2,150 of the accounts receivable were uncollectible and wrote them off. 4. Collected $800 of an account that had previously been written off. 5. Pald $205,000 cash for operating expenses. 6. Adjusted the accounts to recognize uncollectible accounts expense for Year 2. Jova estimates uncollectible accounts expense will be 0.5 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. b. Show the effect of each transaction on the elements of the financial statements, using a horizontal statements model like the one shown here. Use + for increase, - for decrease, and leave the cell blank if there is no effect. Also, in the Cash Flow column, Indicate whether the item is an operating activity (OA), Investing activity (IA), or financing activity (FA). The first transaction is entered as an example. (Hint Closing entries do not affect the statements model.) (If there is no effect on the Statement of Cash Flow, leave the cell blank. Not all cells will require entry.) JOVA COMPANY Horizontal Statements Model Event No. Assets Liabilities + Equity Revenues Expenses = Net Income Statement of Cash Flow Year 1 1. + = + FA 2. + 3. = + 4. ++ 5. Year 2 1. 2. = 3. + + + + + 4a. 4b. 5. ++ 6