The following transactions apply to Jova Company for Year 1, the first year of operation: Issued $13,500 of common stock for cash. Recognized $68,500 of service revenue earned on account. Collected $60,800 from accounts receivable. Paid operating expenses of $35,600. 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 $76,000 of service revenue on account. Collected $68,800 from accounts receivable. Determined that $970 of the accounts receivable were uncollectible and wrote them off. Collected $200 of an account that had previously been written off. Paid $49,200 cash for operating expenses. Adjusted the accounts to recognize uncollectible accounts expense for Year 2. Jova estimates uncollectible accounts expense will be 1.0 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.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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The following transactions apply to Jova Company for Year 1, the first year of operation:

 

  1. Issued $13,500 of common stock for cash.

  2. Recognized $68,500 of service revenue earned on account.

  3. Collected $60,800 from accounts receivable.

  4. Paid operating expenses of $35,600.

  5. 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:

 

  1. Recognized $76,000 of service revenue on account.

  2. Collected $68,800 from accounts receivable.

  3. Determined that $970 of the accounts receivable were uncollectible and wrote them off.

  4. Collected $200 of an account that had previously been written off.

  5. Paid $49,200 cash for operating expenses.

  6. Adjusted the accounts to recognize uncollectible accounts expense for Year 2. Jova estimates uncollectible accounts expense will be 1.0 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.

c. Organize the transaction data in accounts under an accounting equation.
Complete this question by entering your answers in the tabs below.
Req C1
Event
1.
2.
3.
4.
5.
Bal.
Organize the transaction data in accounts under an accounting equation for Year 1. (Enter any decreases to account balances with a minus sign. If
there is no effect on the Accounts Titles for Retained Earnings, leave the cell blank. Not all cells will require entry.)
Req C2
Cash
Assets
13,500+
+
60,800 +
+
74,300 +
NRV Accounts
Receivable
68,500 =
(60,800) =
=
1,370 =
9,070 =
JOVA COMPANY
Accounting Equation for the Year 1
Equity
Liabilities +
+
+
+
+
+
0 +
Common
Stock
13,500 +
+
+
+
+
+
13,500 +
< Req C1
Retained
Earnings
68,500
1,370
69,870
Accounting Titles for Retained
Earnings
Show less
Req C2 >
Transcribed Image Text:c. Organize the transaction data in accounts under an accounting equation. Complete this question by entering your answers in the tabs below. Req C1 Event 1. 2. 3. 4. 5. Bal. Organize the transaction data in accounts under an accounting equation for Year 1. (Enter any decreases to account balances with a minus sign. If there is no effect on the Accounts Titles for Retained Earnings, leave the cell blank. Not all cells will require entry.) Req C2 Cash Assets 13,500+ + 60,800 + + 74,300 + NRV Accounts Receivable 68,500 = (60,800) = = 1,370 = 9,070 = JOVA COMPANY Accounting Equation for the Year 1 Equity Liabilities + + + + + + 0 + Common Stock 13,500 + + + + + + 13,500 + < Req C1 Retained Earnings 68,500 1,370 69,870 Accounting Titles for Retained Earnings Show less Req C2 >
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