The following transactions apply to Jova Company for Year 1, the first year of operation:

Issued $15,500 of common stock for cash.

Recognized $64,500 of service revenue earned on account.

Collected $57,600 from accounts receivable.

Paid operating expenses of $36,000.

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:

Recognized $72,000 of service revenue on account.

Collected $65,600 from accounts receivable.

Determined that $890 of the accounts receivable were uncollectible and wrote them off.

Collected $300 of an account that had previously been written off.

Paid $48,400 cash for operating expenses.

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. Complete all requirements for Year 1 prior to beginning the requirements for Year 2. d-1.

Prepare the income statement, statement of changes in stockholdersâ equity, balance sheet, and statement of cash flows for Year 1.

Income statement balance  for year 1 = $27210

Income statement balance  for year 2 = $22880

Explanation:

                   Jova Company Year 1 Balance Sheet

                         ASSETS                           Stockholder's Equity

S/no ( Cash, Account receivable, Allowance) (Stock,      Earning)

1.       $15,500                                                   $15,500      

2                              $64,500                                           $64,500  

3.     $57,600         -$57,600                                                            

4.      -$36,000                                                                -$36,000  

5.                                                     $1,290                     -$1,290                                                                        

Bal.   $37,100  $6,900      $1,290      $15,500  $27,210

Bad debt expense = 64500*2%=$1,290            

              Jova Company Year 2 Balance Sheet

                         ASSETS                                            Stockholder's Equity

S/no ( Cash,  Account receivable, Allowance)    (Stock  earning)

Bal.    $37,100       $6,900              $1,290       $15,500    $27,210

  1                             $72,000                                          $72,000

2.        $65,600     -$65,600

3.                             -$890               -$890

4.                              $300                $300

5      $300              -$300                                                            

6.   -$48,400                                                                   -$48,400   7.                                                     $720                       -$720

Bal.$54,600        $12,410          $1,420     $15,500   $50,090  

Bad debt expense = 72000*1%  $720  

                                  INCOME STATEMENT FOR YEAR 1        

Revenues-      Expenses    =            Net income

$64,500                      -                             $64,500  

                                $36,000                     -$36,000

                                   $1,290                      -$1,290    

             BALANCE:                                      $27210

  INCOME STATEMENT FOR YEAR 2    

Revenues-       Expenses    =            Net income

$72,000                      -                             $72,000  

                                $48,400                   -$48,400

                                   $720                     -$720  

             BALANCE:                                    $ 22880

answer; operating revenues;