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Rosie Dry Cleaning was started on January 1, Year 1. It experienced the following events during its first two years of operation: Events Affecting Year 1 1. Provided $33,830 of cleaning services on account. 2. Collected $27,064 cash from accounts receivable. 3. Adjusted the accounting records to reflect the estimate that uncollectible accounts expense would be 1 percent of the cleaning revenue on account. Events Affecting Year 2 1. Wrote off a $254 account receivable that was determined to be uncollectible. 2. Provided $39,480 of cleaning services on account. 3. Collected $34,940 cash from accounts receivable. 4. Adjusted the accounting records to reflect the estimate that uncollectible accounts expense would be 1 percent of the cleaning revenue on account. Required a. Organize the transaction data in accounts under an accounting equation. b. Determine the following amounts: 1. (1) Net income for Year 1. 2. (2) Net cash flow from operating activities for Year 1. 3. (3) Balance of accounts receivable at the end of Year 1. 4. (4) Net realizable value of accounts receivable at the end of Year 1. c. Determine the following amounts: 1. (1) Net income for Year 2. 2. (2) Net cash flow from operating activities for Year 2. 3. (3) Balance of accounts receivable at the end of Year 2. 4. (4) Net realizable value of accounts receivable at the end of Year 2. ROSIE DRY CLEANING Accounting Equation for the Year 1 Balance Sheet Assets Equity Accounts Allowance Retained Receivable Earnings Event Accounts Titles for Retained Earnings Cash + 1. 2. ++ 3. Bal. 0 + 0 0 ROSIE DRY CLEANING Accounting Equation for the Year 2 Balance Sheet Assets Equity Accounts Titles for Retained Earnings Accounts Retained Receivable Allowance Earnings Event Cash + Bal. 1. + + N 3. + 4. + Bal. 0 + Net income Net cash flow from operating activities Balance of accounts receivable Net realizable value of accounts receivable Net income Net cash flow from operating activities Balance of accounts receivable Net realizable value of accounts receivable