### Required Information**The following information applies to the questions displayed below.**The following transactions apply to Jova Company for Year 1, the first year of operation:1. Issued $20,000 of common stock for cash.2. Recognized $60,000 of service revenue earned on account.3. Collected $54,000 from accounts receivable.4. Paid operating expenses of $37,800.5. 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 Year 2:1. Recognized $67,500 of service revenue on account.2. Collected $62,000 from accounts receivable.3. Determined that $800 of the accounts receivable were uncollectible and wrote them off.4. Collected $300 of an account that had previously been written off.5. Paid $47,500 cash for operating expenses.6. Adjusted the accounts to recognize uncollectible accounts expense for Year 2. Jova estimates uncollectible accounts expense will be 10 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. # Jova Company Horizontal Statements Model## OverviewThis table represents the horizontal statements model for Jova Company, detailing changes across assets, liabilities, equity, revenues, expenses, net income, and cash flows over two years. ### Column Headers- **Event No.**: Indicates the sequence of transactions or events.- **Assets**: Changes in assets, denoted by "+" or "–".- **Liabilities**: Changes in liabilities, including increases or decreases.- **Equity**: Changes in equity, indicating alterations in ownership value.- **Revenues**: Revenue changes that affect the income.- **Expenses**: Changes in expenses, related to operational costs.- **Net Income**: Effect on net income, indicating profit or loss dynamics.- **Statement of Cash Flow**: Tracks cash flow activities: - **FA**: Financing Activities - **OA**: Operating Activities - **IA**: Investing Activities (not shown)### Detailed Explanation by Year#### Year 11. **Event 1**: - Assets increase. - No change in liabilities or equity. - Positive impact on revenues and net income. - Financing activity (FA). 2. **Event 2**: - Assets increase. - No change in liabilities or equity. - Positive impact on net income. - Operating activity (OA). 3. **Event 3**: - Assets fluctuate slightly. - No change in liabilities or equity. - Positive impact on net income. - Operating activity (OA). 4. **Event 4**: - Assets decrease. - No change in liabilities. - Equity increases. - Positive impact on revenues and net income. 5. **Event 5**: - Assets decrease. - Liability increase. - Negative net income effect. - Operating activity (OA).#### Year 21. **Event 1**: - Assets increase. - No change in liabilities or equity. - Positive revenue effect. - Operating activity (OA). 2. **Event 2**: - Assets fluctuate. - No change in liabilities. - Positive net income impact. - Operating activity (OA). 3. **Event 3**: - Assets decrease. - Liability increase. - Negative cash flow effect

The important Accounting Equation which is always applicable in all kind of transactionsAssets = Liabilities + EquityAll the Entries are entered on the Double entry System and so it effects minimum two accounts. Financial statements are prepared to show the financial position of the organisation during the accounting period.Showing Statement in final step.

Answered: Required Complete the following…

Business

Accounting

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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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