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Businesses using the allowance method for the recognition of uncollectible accounts expense commonly experience four accounting events:
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Question 1: Show the effect of each event on the elements of the financial statements, using a horizontal statements model like the one shown here. Use the following coding scheme to record your answers: increase is +, decrease is -, leave the cell blank for not affected. In the cash flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). The first transaction is entered as an example.
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a. debits credits cash 48000 accounts rec. 224000 inventory 60000 buildings and equ. 370000 accounts payable 93000
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