80.2K

Verified Solution

Link Copied!

Brief Exercise 7-1 (Algo) Analyzing financial statement effects of accounting for uncollectible accounts using the percent of revenue allowance method LO 7.1 CB Winter Sports specializes in providing ski lessons to beginners. The company uses the allowance method to account for uncollectible accounts expense, CB Sports experienced the following four accounting events in Year 1 1. Recognized $262,000 of revenue on account. 2. Collected $122.000 cash from accounts recelvable. 3. Wrote off uncollectible occounts of $2.100. 4. Reconnired uncollectible accounts expense CA estimated that uncollectible accounts expense will be 3 percent of sales on account. Required: Use a hortantal tinancial statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. More specifically, record the amounts of the events into the model. The first tiansaction is shown as an example. Note: In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, and NC for net change in eash. Enter any decreases to account balances and cash outflows with a minus sign. Not all cells requite an input-leave cells blank if there is no corresponding input needed. Required: Use a horizontal financial statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. More specifically, record the amounts of the events into the model. The first transaction is shown as an example. Note: in the Cash Flow column, use OA to designate operating activity, IA for investment activity. FA for financing activity, and NC for net change in cash. Enter any decreases to account balances and cash outflows with a minus sign. Not all cells require an input - leave cells blank if there is no corresponding input needed

Answer & Explanation Solved by verified expert

See Answer