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

Issued $16,500 of common stock for cash.

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

Collected $56,800 from accounts receivable.

Paid operating expenses of $36,400.

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:

Recognized $71,000 of service revenue on account.

Collected $64,800 from accounts receivable.

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

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

Paid $48,200 cash for operating expenses.

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

d-2. Prepare the income statement, statement of changes in stockholders equity, balance sheet, and statement of cash flows for Year 2.

JOVA COMPANY
Income Statement
For the Year Ended Year 2
Service revenue
Expenses
Operating expenses
Uncollectible accounts expense
Total expenses		0
Net income

JOVA COMPANY
Statement of Changes in Stockholders Equity
For the Year Ended Year 2
Beginning common stock
Plus: Stock issued
Ending common stock		$0
Beginning retained earnings
Plus: Net income
Ending retained earnings		0
Total stockholders equity		$0

JOVA COMPANY
Balance Sheet
As of December 31, Year 2
Assets
Cash
Accounts receivable
Less: Allowance for doubtful accounts		0
Total assets		$0
Liabilities
Stockholders equity
Common stock
Retained earnings
Total stockholders equity		0
Total liabilities and stockholders equity		$0

JOVA COMPANY

Statement of Cash Flows

For the Year Ended Year 2

Cash flows from operating activities:

Inflow from customers

Outflow for expenses

Net cash flow from operating activities$0

Cash flows from investing activities

Cash flows from financing activities

Net change in cash0

Plus: Beginning cash balance

Ending cash balance$0