Question

Workout Progra mework 0 Saved Help Save The following transactions apply to Jova Company for 2018, the first year of operation: 1. Issued $12.500 of common stock for cash. 2. Recognized $67,500 of service revenue earned on account. 3. Collected $60,000 from accounts receivable. 4. Paid operating expenses of $35,400. 5. 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 2019: 1. Recognized $75,000 of service revenue on account. 2. Collected $68,000 from accounts receivable. 3. Determined that $950 of the accounts receivable were uncollectible and wrote them off. 4. Collected $300 of an account that had previously been written off. 5. Paid $49,000 cash for operating expenses. 6. Adjusted the accounts to recognize uncollectible accounts expense for 2019. Jova estimates expense will be 10 percent of sales on account Required Complete the following requirements for 2018 and 2019. Complete all requirements for 2018 prior to beginning the requirements for 2019.

Answer 1

Statement of cash flows for 2018:

JOVA COMPANY
Statement of Cash Flows
For the Year Ended 2018
Cash flows from operating activities:
Inflows from customers	$60,000
Outflow for expenses	($35,400)
Net cash flow from operating activities (i)		$24,600
Cash flows from investing activities (ii)		$0
Cash flows from financing activities
Issuance of common stock	$12,500
Net cash flow from financing activities (iii)		$12,500
Net change in cash (i+ii+iii)		$37,100
Plus: Beginning cash balance		$0
Ending cash balance		$37,100