Reference no: EM132768351

Question - The following transactions apply to Jova Company for Year 1, the first year of operation:

1. Issued $13,000 of common stock for cash.

2. Recognized $68,000 of service revenue earned on account.

3. Collected $60,400 from accounts receivable.

4. Paid operating expenses of $35,500.

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 $75,500 of service revenue on account.

2. Collected $68,400 from accounts receivable.

3. Determined that $960 of the accounts receivable were uncollectible and wrote them off.

4. Collected $100 of an account that had previously been written off.

5. Paid $49,100 cash for operating expenses.

6. 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. All requirements for Year 1 prior to beginning the requirements for Year 2. Organize the transaction data in accounts under an accounting equation for each year.