Exercise 7-5A Analyzing financial statement effects of accounting for uncollectible accounts using the percent of revenue allowance method LO 7-1 Grover Inc. uses the allowance method to account for uncollectible accounts expense. Grover, Inc. experienced the following four accounting events in Year 1: Recognized $71,000 of revenue on account. Collected $65,000 cash from accounts receivable. Wrote off uncollectible accounts of $650. Recognized uncollectible accounts expense. Grover estimated that uncollectible accounts expense will be 2 percent of sales on account.

First, let's add the missing piece of information:

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 cash flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA) or not affected (NA). The first transaction is entered as an example.

The first attached image shows the Effects of events on the financial statements being duly represented.

The second attached image shows the first attached image in a general journal form.