The following transactions apply to Jova Company for Year 1, the first year of operation:
Issued $15,500 of common stock for cash.
Recognized $64,500 of service revenue earned on account.
Collected $57,600 from accounts receivable.
Paid operating expenses of $36,000.
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 $72,000 of service revenue on account.
Collected $65,600 from accounts receivable.
Determined that $890 of the accounts receivable were uncollectible and wrote them off.
Collected $300 of an account that had previously been written off.
Paid $48,400 cash for operating expenses.
Adjusted the accounts to recognize uncollectible accounts expense for Year 2. Jova estimates uncollectible accounts expense will be 1 percent of sales on account.
Required Complete the following requirements for Year 1 and Year 2. Complete all requirements for Year 1 prior to beginning the requirements for Year 2. d-1.
Prepare the income statement, statement of changes in stockholdersâ equity, balance sheet, and statement of cash flows for Year 1.
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The following transactions apply to Jova Company for Year 1, the first year of operation:
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