The company has the following transactions during the year xxx1.

A. Provided $8,400 of services on account.

B. Wrote off of $31 of uncollectible accounts receivable.

C. Recorded the adjusting entry, and estimated that uncollectible account expense would be 1% of revenue earned.

3. Based on the event A when the services were provided, determine how this transaction will affect the Financial Statements.

a) Increase Accounts Receivable and increase Retained Earnings by $8,400.

Increase Revenues and increase Net Income by $8,400. The cash flow is not affected.

b) Increase Cash and increase Inventory by $8,400. Increase Net Income. The cash flow is affected.

c) Increase Accounts Receivable and increase Retained Earnings by $8,400.

Increase Expenses and decrease Net Income by $8,400. The cash flow is not affected.

4. Based on the event B when the write off was registered, determine how this transaction will affect the Financial Statements.

a) Increase Accounts Receivable and increase Allowance for Uncollectible Accounts by $31.

Increase Expenses and decrease Net Income.

b) Decrease Accounts Receivable and decrease Allowance for Uncollectible Accounts by $31.

c) Increase Accounts Receivable and increase Allowance for Uncollectible Accounts by $31.

Increase Expenses and decrease Net Income. The cash flow is affected by $31 less.

5. Based on the event C when the adjusted entry was registered, determine how this transaction will affect the Financial Statements.

a) Decrease Allowance for Uncollectible Accounts and decrease Retained Earnings by $48.

Increase expenses and decrease Net Income by $48.

b) Decrease Allowance for Uncollectible Accounts and decrease Retained Earnings by $84.

Increase expenses and decrease Net Income by $84.

c) Increase Allowance for Uncollectible Accounts and decrease Retained Earnings by $84.

Increase expenses and decrease Net Income by $84.

6. If the Accounts Receivable has a balance of $430,000 after the period ending adjustment, the Uncollectible Account Expense has balance of $35,000 and the Allowance for Uncollectible Accounts has a balance of $25,000. Determine the net realizable value of the Accounts Receivable.

a) $430,000 - $35,000 - $25,000 = $370,000

b) $430,000 - $35,000 = $395,000

c) $430,000 - $25,000 = $405,000