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Faello Inc. experienced the following events during the first two years of its operations: 2014: 1 Provided $70,000 of services on account. 2 Provided $27,000 of services and received cash. 3 Collected $43,000 cash from accounts receivable. 4 Paid $14,000 of salaries expense for the year. Adjusted the accounting records to reflect uncollectible accounts 5 expenses for the year. Faello estimates that 7 percent of the ending accounts receivable balance will be uncollectible. 2015: 1 Wrote off an uncollectible account of $670. 2 Provided $90,000 of services on account. 3 Provided $15,000 of services and collected cash. 4 Collected $72,000 cash from accounts receivable. 5 Paid $30,000 of salaries expense for the year. Adjusted the accounts to reflect uncollectible accounts expenses for the 6 year. Faello estimates that 7 percent of the ending accounts receivable balance will be uncollectible. A. ORGANIZE THE TRANSACTION DATA IN ACCOUNTS UNDER AN ACCOUNTING EQUATION FOR 2014. b. Prepare the income statement for 2014. c. Prepare the statement of changes in stockholders' equity for 2014. d. Prepare the balance sheet for 2014.

Faello Inc. experienced the following events during the first two years of its operations: 2014: 1 Provided $70,000 of services on account. 2 Provided $27,000 of services and received cash. 3 Collected $43,000 cash from accounts receivable. 4 Paid $14,000 of salaries expense for the year. Adjusted the accounting records to reflect uncollectible accounts 5 expenses for the year. Faello estimates that 7 percent of the ending accounts receivable balance will be uncollectible. 2015: 1 Wrote off an uncollectible account of $670. 2 Provided $90,000 of services on account. 3 Provided $15,000 of services and collected cash. 4 Collected $72,000 cash from accounts receivable. 5 Paid $30,000 of salaries expense for the year. Adjusted the accounts to reflect uncollectible accounts expenses for the 6 year. Faello estimates that 7 percent of the ending accounts receivable balance will be uncollectible. A. ORGANIZE THE TRANSACTION DATA IN ACCOUNTS UNDER AN ACCOUNTING EQUATION FOR 2014. b. Prepare the income statement for 2014. c. Prepare the statement of changes in stockholders' equity for 2014. d. Prepare the balance sheet for 2014.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Faello Inc. experienced the following events during the first two years of its operations: 2014: 1 Provided $70,000 of services on account. 2 Provided $27,000 of services and received cash. 3 Collected $43,000 cash from accounts receivable. 4 Paid $14,000 of salaries expense for the year. Adjusted the accounting records to reflect uncollectible accounts 5 expenses for the year. Faello estimates that 7 percent of the ending accounts receivable balance will be uncollectible. 2015: 1 Wrote off an uncollectible account of $670. 2 Provided $90,000 of services on account. 3 Provided $15,000 of services and collected cash. 4 Collected $72,000 cash from accounts receivable. 5 Paid $30,000 of salaries expense for the year. Adjusted the accounts to reflect uncollectible accounts expenses for the 6 year. Faello estimates that 7 percent of the ending accounts receivable balance will be uncollectible. A. ORGANIZE THE TRANSACTION DATA IN ACCOUNTS UNDER AN ACCOUNTING EQUATION FOR 2014. b. Prepare the income statement for 2014. c. Prepare the statement of changes in stockholders' equity for 2014. d. Prepare the balance sheet for 2014.
Transcribed Image Text:Faello Inc. experienced the following events during the first two years of its operations: 2014: 1 Provided $70,000 of services on account. 2 Provided $27,000 of services and received cash. 3 Collected $43,000 cash from accounts receivable. 4 Paid $14,000 of salaries expense for the year. Adjusted the accounting records to reflect uncollectible accounts 5 expenses for the year. Faello estimates that 7 percent of the ending accounts receivable balance will be uncollectible. 2015: 1 Wrote off an uncollectible account of $670. 2 Provided $90,000 of services on account. 3 Provided $15,000 of services and collected cash. 4 Collected $72,000 cash from accounts receivable. 5 Paid $30,000 of salaries expense for the year. Adjusted the accounts to reflect uncollectible accounts expenses for the 6 year. Faello estimates that 7 percent of the ending accounts receivable balance will be uncollectible. A. ORGANIZE THE TRANSACTION DATA IN ACCOUNTS UNDER AN ACCOUNTING EQUATION FOR 2014. b. Prepare the income statement for 2014. c. Prepare the statement of changes in stockholders' equity for 2014. d. Prepare the balance sheet for 2014.
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