atel Service Company does make a few sales on account but is mostly a cash business. Consequently, it uses the direct write-off method to account for uncollectible accounts. During Year 1, Patel Service Company earned $37,700 of cash revenue and $9,425 of revenue on account. Cash operating expenses were $26,624. After numerous attempts to collect a $265 account receivable from Sam Stephens, the account was determined to be uncollectible in Year 1. Required: Show the effects of (1) cash revenue, (2) revenue on account, (3) cash expenses, and (4) write off of the uncollectible account on the financial statements using a horizontal statements model. In the Statement of Cash Flows column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). Use "NC" for net change in cash. Leave blank to indicate that an element is not affected by the event. What amount of net income did Patel Service Company report on the Year 1 income statement? Prepare the general journal entries for the four accounting events. Show the effects of (1) cash revenue, (2) revenue on account, (3) cash expenses, and (4) write off of the uncollectible account on the financial statements using a horizontal statements model. In the Statement of Cash Flows column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). Use "NC" for net change in cash. Leave blank to indicate that an element is not affected by the event. (Enter any decreases to account balances and cash outflows with a minus sign. A)What amount of net income did Patel Service Company report on the Year 1 income stat B)Prepare the general journal entries for the four accounting events. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
atel Service Company does make a few sales on account but is mostly a cash business. Consequently, it uses the direct write-off method to account for uncollectible accounts. During Year 1, Patel Service Company earned $37,700 of cash revenue and $9,425 of revenue on account. Cash operating expenses were $26,624. After numerous attempts to collect a $265 account receivable from Sam Stephens, the account was determined to be uncollectible in Year 1.
Required:
- Show the effects of (1) cash revenue, (2) revenue on account, (3) cash expenses, and (4) write off of the uncollectible account on the financial statements using a horizontal statements model. In the Statement of
Cash Flows column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). Use "NC" for net change in cash. Leave blank to indicate that an element is not affected by the event. - What amount of net income did Patel Service Company report on the Year 1 income statement?
- Prepare the general journal entries for the four accounting events.
Show the effects of (1) cash revenue, (2) revenue on account, (3) cash expenses, and (4) write off of the uncollectible account on the financial statements using a horizontal statements model. In the Statement of Cash Flows column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). Use "NC" for net change in cash. Leave blank to indicate that an element is not affected by the event. (Enter any decreases to account balances and
A)What amount of net income did Patel Service Company report on the Year 1 income stat
B)Prepare the general journal entries for the four accounting events. (If no entry is required for a transaction/event, select "No
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 3 images
