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

1. Issued $16,500 of common stock for cash.

2. Recognized $63,500 of service revenue earned on account.

3. Collected $56,800 from accounts receivable.

4. Paid operating expenses of $36,400.

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 $71,000 of service revenue on account.

2. Collected $64,800 from accounts receivable.

3. Determined that $870 of the accounts receivable were uncollectible and wrote them off.

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

5. Paid $48,200 cash for operating expenses.

6. Adjusted the accounts to recognize uncollectible accounts expense for Year 2. Jova estimates uncollectible accounts expense will be 1.0 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.

3. Organize the transaction data in accounts under an accounting equation.

• Req C1
• Req C2

Organize the transaction data in accounts under an accounting equation for Year 1. (Enter any decreases to account balances with a minus sign. If there is no effect on the Accounts Titles for Retained Earnings, leave the cell blank. Not all cells will require entry.)

JOVA COMPANY
Accounting Equation for the Year 1
Event	Assets			=	Liabilities	+	Equity			Accounting Titles for Retained Earnings
	Cash	+	NRV Accounts Receivable				Common Stock	+	Retained Earnings
1.		+		=		+		+
2.		+		=		+		+
3.		+		=		+		+
4.		+		=		+		+
5.		+		=		+		+
Bal.		+		=		+		+

• Req C2

Organize the transaction data in accounts under an accounting equation for Year 2. (Enter any decreases to account balances with a minus sign. If there is no effect on the Accounts Titles for Retained Earnings, leave the cell blank. Not all cells will require entry.)

JOVA COMPANY
Accounting Equation for the Year 2
Event	Assets			=	Liabilities	+	Equity			Accounts Titles for Retained Earnings
	Cash	+	NRV Accounts Receivable				Common Stock	+	Retained Earnings
Bal.		+		=		+		+
1.		+		=		+		+
2.		+		=		+		+
3.		+		=		+		+
4a.		+		=		+		+
4b.		+		=		+		+
5.		+		=		+		+
6.		+		=		+		+
Bal.		+		=		+		+