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Rosie Dry Cleaning was started on January 1, Year 1. It experienced the following events during its first two years of operation: Events Affecting Year 1 1. Provided $45,000 of cleaning services on account. 2. Collected $39,000 cash from accounts receivable. 3. Adjusted the accounting records to reflect the estimate that uncollectible accounts expense would be 1 percent of the cleaning revenue on account. Events Affecting Year 2 1. Wrote off a $300 account receivable that was determined to be uncollectible. 2. Provided $62,000 of cleaning services on account. 3. Collected $61,000 cash from accounts receivable. 4. Adjusted the accounting records to reflect the estimate that uncollectible accounts expense would be 1 percent of the cleaning revenue on account. Required a. Organize the transaction data in accounts under an accounting equation for each year. b. Determine the following amounts: 1. (1) Net income for Year 1. 2. (2) Net cash flow from operating activities for Year 1. 3. (3) Balance of accounts receivable at the end of Year 1. 4. (4) Net realizable value of accounts receivable at the end of Year 1. c. Determine the following amounts: 1. (1) Net income for Year 2. 2. (2) Net cash flow from operating activities for Year 2. 3. (3) Balance of accounts receivable at the end of Year 2. 4. (4) Net realizable value of accounts receivable at the end of Year 2.

Complete this question by entering your answers in the tabs below. Reg A1 Event Bal. Req C Organize the transaction data in accounts under an accounting equation for Year 2. (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.) 1. 2. 3. 4. Bal Req A2 Cash Assets + 39,000 + + 61,000 + + Req B 100,000 + Balance Sheet ROSIE DRY CLEANING Accounting Equation for the Year 2 NRV Accounts Receivable Answer is not complete. 6,000 >= (300) - 62,000 (61,000) 6,700 Equity Retained Earnings 44,550 62,000 (620) 105,930 < Req A1 Accounts Titles for Retained Earnings Service revenue Uncollectible accounts expense Req B >

Rel A1 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.) Event 1. 2. 3. Bal. Cash 39,000 39,000 Req A2 Assets + + + + Req B Balance Sheet ROSIE DRY CLEANING Accounting Equation for the Year 1 NRV Accounts Receivable 45,000 (39,000) 6,000 = Req C = Equity Retained Earnings 45,000 (450) 44,550 Req A1 Accounts Titles for Retained Earnings Service revenue Uncollectible accounts expense Req A2 >