Reference no: EM132743143
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.
Prepare the income statement, statement of changes in stockholders' equity, balance sheet, and statement of cash flows for Year 2.