Prepare the income statement, statement of changes in stockholders’ equity, balance sheet, and statement of cash flows for Years 1 & 2.
Prepare the income statement, statement of changes in stockholders’ equity, balance sheet, and statement of cash flows for Years 1 & 2.
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter15: Financial Statement Analysis
Section: Chapter Questions
Problem 14BEA: Last year, Nikkola Company had net sales of 2.299.500,000 and cost of goods sold of 1,755,000,000....
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Prepare the income statement, statement of changes in
![Required Information
[The following information applies to the questions displayed below.]
The following transactions apply to Jova Company for Year 1, the first year of operation:
1. Issued $10,000 of common stock for cash.
2. Recognized $210,000 of service revenue earned on account.
3. Collected $162,000 from accounts receivable.
4. Paid $125,000 cash for operating expenses.
5. Adjusted the accounts to recognize uncollectible accounts expense. Jova uses the allowance method of accounting for
uncollectible accounts and estimates that uncollectible accounts expense will be 1 percent of sales on account.
The following transactions apply to Jova for Year 2:
1. Recognized $320,000 of service revenue on account.
2. Collected $335,000 from accounts receivable.
3. Determined that $2,150 of the accounts receivable were uncollectible and wrote them off.
4. Collected $800 of an account that had previously been written off.
5. Paid $205,000 cash for operating expenses.
6. Adjusted the accounts to recognize uncollectible accounts expense for Year 2. Jova estimates uncollectible accounts
expense will be 0.5 percent of sales on account.
Complete the following requirements for Year 1 and Year 2. Complete all requirements for Year 1 prior to beginning the
requirements for Year 2.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc262d289-2c02-42d8-a51f-df3a8d8e53ed%2F50fe49ff-c45d-4d3a-b889-85925e35ba5a%2Fd0leo4u_processed.png&w=3840&q=75)
Transcribed Image Text:Required Information
[The following information applies to the questions displayed below.]
The following transactions apply to Jova Company for Year 1, the first year of operation:
1. Issued $10,000 of common stock for cash.
2. Recognized $210,000 of service revenue earned on account.
3. Collected $162,000 from accounts receivable.
4. Paid $125,000 cash for operating expenses.
5. Adjusted the accounts to recognize uncollectible accounts expense. Jova uses the allowance method of accounting for
uncollectible accounts and estimates that uncollectible accounts expense will be 1 percent of sales on account.
The following transactions apply to Jova for Year 2:
1. Recognized $320,000 of service revenue on account.
2. Collected $335,000 from accounts receivable.
3. Determined that $2,150 of the accounts receivable were uncollectible and wrote them off.
4. Collected $800 of an account that had previously been written off.
5. Paid $205,000 cash for operating expenses.
6. Adjusted the accounts to recognize uncollectible accounts expense for Year 2. Jova estimates uncollectible accounts
expense will be 0.5 percent of sales on account.
Complete the following requirements for Year 1 and Year 2. Complete all requirements for Year 1 prior to beginning the
requirements for Year 2.
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