The following transactions apply to Jova Company for 2016, the first year of operation:
1. Issued $10,000 of common stock for cash.
2. Recognized $210,000 of service revenue earned on account.
3. Collected $162,000 from accounts receivable.
4. Paid $125,000 cash for operating expenses.
5. Adjusted the accounts to recognize uncollectible accounts expense. Jova uses the allowance method of accounting for uncollectible accounts and estimates that uncollectible accounts expense will be 1 percent of sales on account.
The following transactions apply to Jova for 2017:
1. Recognized $320,000 of service revenue on account.
2. Collected $335,000 from accounts receivable.
3. Determined that $2,150 of the accounts receivable were uncollectible and wrote them off.
4. Collected $800 of an account that had previously been written off.
5. Paid $205,000 cash for operating expenses.
6. Adjusted the accounts to recognize uncollectible accounts expense for 2017. Jova estimates uncollectible accounts expense will be 0.5 percent of sales on account. Complete the following requirements for 2016 and 2017. Complete all requirements for 2016 prior to beginning the requirements for 2017.
Question 1:Prepare the income statement, statement of changes in stockholders’ equity, balance sheet, and statement of cash flows for the year 2016.
Question 2: Prepare the income statement, statement of changes in stockholders’ equity, balance sheet, and statement of cash flows for the year 2017.
Question 3:
Prepare closing entries and post these closing entries to the T-accounts and prepare a post-closing trial balance for the year 2016.
Question 4:Prepare closing entries and post these closing entries to the T-accounts and prepare a post-closing trial balance for the year 2017.