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

$1.$ Issued $$15,000$ of common stock for cash.

$2.$ Recognized $$70\mathrm{.}000$ of service revenue earned on account.

S$.$ Collected $$62,000$ from accounts receivable.

$4.$ Paid operating expenses of $$35\mathrm{.}900$

$5.$ 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 $2$ percent of sales on account.

The following transactions apply to Jova for Year $2$

$1.$ Recognized $$77,500$ of service revenue on account.

$2.$ Collected $$70\mathrm{.}000$ from accounts receivable.

$3.$ Determined that $$1,000$ of the accounts receivable were uncollectible and wrote them off.

$4.$ Collected $$200$ of an account that had previously been written off.

$5.$ Paid $$49\mathrm{.}500$ cash for operating expenses.

$6.$ Adjusted the accounts to recognize uncollectible accounts expense for Year $2.$

Jova estimates uncollectible accounts

expense will be $1\mathrm{.}0$ 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.$)$