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Rosie Dry Cleaning was started on January 1, 2018. It experienced the following events during its first two years of operation: Events Affecting 2018 Provided
Rosie Dry Cleaning was started on January 1, 2018. It experienced the following events during its first two years of operation:
Events Affecting 2018
- Provided $28,940 of cleaning services on account.
- Collected $23,152 cash from accounts receivable.
- Adjusted the accounting records to reflect the estimate that uncollectible accounts expense would be 1 percent of the cleaning revenue on account.
Events Affecting 2019
- Wrote off a $217 account receivable that was determined to be uncollectible.
- Provided $33,773 of cleaning services on account.
- Collected $29,889 cash from accounts receivable.
- Adjusted the accounting records to reflect the estimate that uncollectible accounts expense would be 1 percent of the cleaning revenue on account.
Required
- Organize the transaction data in accounts under an accounting equation for each year.
- Determine the following amounts:
- (1) Net income for 2018.
- (2) Net cash flow from operating activities for 2018.
- (3) Balance of accounts receivable at the end of 2018.
- (4) Net realizable value of accounts receivable at the end of 2018.
- Determine the following amounts:
- (1) Net income for 2019.
- (2) Net cash flow from operating activities for 2019.
- (3) Balance of accounts receivable at the end of 2019.
- (4) Net realizable value of accounts receivable at the end of 2019.
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