Patel Service Co. does make a few sales on account but is mostly a cash business. Consequently, it uses the direct write-off method to account for uncollectible accounts. During Year 1, Patel Service Co. earned $35,000 of cash revenue and $4,500 of revenue on account. Cash operating expenses were $19,000. After numerous attempts to collect a $120 account receivable from Sam Stephens, the account was determined to be uncollectible in Year 1. Required a. Show the effects of (1) cash revenue, (2) revenue on account, (3) cash expenses, and (4) write off of the uncollectible account on the financial statements using a horizontal statements model like the one shown here. In the Statement of Cash Flows column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). b. What amount of net income did Patel Service Co. report on the Year 1 income statement?
Answers (1)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Patel Service Co. does make a few sales on account but is mostly a cash business. Consequently, it uses the direct write-off method to ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
A leadership style that leans toward participative management is more likely to be found acceptable by the majority of today's workers than a style that tends toward benevolent autocratic behavior.
Answers (1)
On April 1, Alliance Company purchased $50,000 of Tetter Company's 12% bonds at 100 plus accrued interest of $2,000. On June 30, Alliance received its first semiannual interest.
Answers (2)
Metlock, Inc. sells merchandise on account for $2000 to Morton Company with credit terms of 2/8, n/30. Morton Company returns $600 of merchandise that was damaged, along with a check to settle the account within the discount period.
Answers (1)
Stephanie is a real estate salesperson employed by Pacific Coast Properties. She sells a home listed by another broker, Island View Realty.
Answers (1)
if you are married and want to deduct charitable contributions from your adjusted gross income which tax form should you use. Hurry
Answers (1)
New Questions in Business
Clara, at age 47, decided to adopt a child on her own because she tired of waiting around for "mr. Right" to come along. She decided to move on with her life. Clara is an example of a (n) :
Answers (1)
Sandusky Company borrowed $28,000 from the Lakeside Bank by issuing a 10% three-year installment note. Sandusky agreed to repay the principal and interest by making annual payments in the amount of $11,259.21.
Answers (1)
Some discount stores put products in large bins and let consumers hunt and find bargains. The price these consumers pay includes: a. the time the product was full price and didn't sell b. the value of their time and energy c.
Answers (1)
Which one of the following is not a financial intermediary? A. Security dealers B. Insurance companies C. Real estate investment trusts D. Pension funds
Answers (1)
Sherry often makes long personal phone calls from her desk during the work day. Alvin likes to wear shorts and old t-shirts to work during the summer. Jillian usually arrives 10 minutes late to the office in the morning.
Answers (1)