The following data were selected from the records of Tunga Company for the year ended December 31, 2015:

The company sells merchandise for cash and on open account with credit terms 2/ 10, n/ 30. Assume a unit sales price of $ 500 in all transactions, and use the gross method to record sales revenue. The following transactions occurred during 2015:
a. Sold merchandise for cash, $ 234,000.
b. Sold merchandise to R. Agostino on open account for $ 11,500.
c. Sold merchandise to K. Black on open account for $ 25,000.
d. Two days after purchase, R. Agostino returned one of the units purchased in (b) and received account credit.
e. Sold merchandise to B. Assaf on open account for $ 26,000.
f. R. Agostino paid his account in full within the discount period.
g. Collected $ 98,000 cash from customers for credit sales made in 2015, all within the discount periods.
h. K. Black paid the invoice in (c) within the discount period.
i. Sold merchandise to R. Fong on open account for $ 17,500.
j. Three days after paying the account in full,
K. Black returned seven defective units and received a cash refund.
k. Collected $ 6,000 cash on a trade receivable for sales made in 2014. The amount was received after the discount period.
l. Wrote off an old account of $ 3,000 after deciding that the amount would never be collected.
m. The company estimates that 4 percent of the trade receivables at December 31, 2015, will be uncollectible in the future.
Required:

1. Using the following categories, indicate the dollar effect (1 for increase, 2 for decrease, and N for no effect) of each listed transaction, including the write- off of the uncollectible account and the adjusting entry for estimated bad debts (ignore cost of sales). The effects of the first transaction are shown as an example:

2. Show how the accounts related to the preceding sale and collection activities should be reported on the statement of earnings for 2015. (Treat sales discounts as contra revenues.)

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Balances at January 1, 2015 Trade receivables (various customers) Allowance for doubtful accounts $115,000 4.000 Sales Discounts (taken) Sales Returns and Allowances Sales Revenue Bad Debt Exponse a $234,000