Question

Transcribed Image Text:CB Winter Sports specializes in providing ski lessons to beginners. The company uses the allowance method to account for
uncollectible accounts expense CB Winter Sports experienced the following four accounting events in Year 1:
1. Recognized $266,000 of revenue on account.
2. Collected $126,000 cash from accounts receivable.
3. Wrote off uncollectible accounts of $2,300,
4. Recognized uncollectible accounts expense, CB Winter Sports estimated that uncollectible accounts expense will be 3 percent of
sales on account
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. Also, in the Statement of Cash Flows column, classify
the cash flows as operating activities (OA), investing activities (IA), or financing activities (FA) The first transaction is shown as an
example.
Note: Enter any decreases to account balances and cash outflows with a minus sign. Leave cells blank if no input is needed.
Balance Sheet
Income Statement
Assets
Liabilities
Stockholders' Equity
Event
Number
Net Realizable
Value of
Accounts
Cash
Accounts
Payable
Common
Stock
Retained
Earnings
Revenue
Expenses-
Net
Income
Statement of Cash
Flows
Receivable
1.
+
266,000
266,000
266,000
266,000
=
2.
3.
4.
Total
+
0+
266,000 =
266,000 266,000
0=
266,000
0
NC
"NC Net change in cash
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