Concept explainers
Analyzing financial statement effects of accounting for uncollectible accounts using the percent of revenue allowance method
Grover Inc. uses the allowance method to account for uncollectible accounts expense. Grover Inc. experienced the following four accounting events in 2018:
1. Recognized $92,000 of revenue on account.
2. Collected $78,000 cash from
3. Wrote off uncollectible accounts of $720.
4. Recognized uncollectible accounts expense. Grover estimated that uncollectible accounts expense will be 1 percent of sales on account.
Required
Show the effect of each event on the elements of the financial statements, using a horizontal statements model like the one shown here. Use + for increase, − for decrease, and NA for not affected. In the
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