The following transactions apply to Jova Company for Year 1, the first year of operation:

1. Issued $17,000 of common stock for cash.
2. Recognized $217,000 of service revenue earned on account.
3. Collected $169,700 from accounts receivable.
4. Paid $132,000 cash for operating expenses.
5. Adjusted the 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 $327,000 of service revenue on account.
2. Collected $342,000 from accounts receivable.
3. Determined that $2,500 of the accounts receivable were uncollectible and wrote them off.
4. Collected $1,500 of an account that had previously been written off.
5. Paid $212,000 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.

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. Use + for increase, for decrease, and leave cell blank for not affected. Also, in the Statement of Cash Flows column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). Leave blank to indicate that an element was not affected by the event. The first transaction is entered as an example. (Hint: Closing entries do not affect the statements model.)