Faello Inc. experlenced the following events for the first two years of its oper

Question

Faello Inc. experlenced the following events for the first two years of its operations: 2014 1. Provided $90,000 of sevices on account 2. Provided $29,000 of services and recelved cash. 3. Collected $61,000 cash from accounts recelvable 4. Pald $20,000 of salaries expense for the year. 5. Adjusted the accounting records to reflect uncollectible accounts expense for the year. Faello estimates that 8 percent of the ending accounts recelvable balance will be uncollectible 2015 1. Wrote off an uncollectible account of $710. 2. Provided $110,000 of services on account 3. Provided $25,000 of services and collected cash. 4. Collected $92,000 cash from accounts recelvable 5. Pald $24,000 of salarles expense for the year. 6. Adjusted the accounts to reflect uncollectible accounts expense for the year. Faello estimates that 8 percent of the ending accounts recelvable balance will be uncollectible alue 0.00 points Required a. Organize the transaction data in accounts under an accounting equation for 2014. (Enter any decreases to account balances with a minus sign. Select "NA" if there is no effect on the "Accounts Titles for Retained Earnings".) FAELLO INC Accounting Equation for the Year 2014 Assets Equity Accounting Titles for Retained Earnings Event Cash Accounts Liabilities+ Retained Receivable Allowance Earnings 4 5 Bal

Explanation / Answer

Accounting Equation Event Cash Accounts Allowance liabilities Retained Accounting titles for receivable earnings Retained earnings 1 90,000 90,000 Service revenue 2 29,000 29,000 Service revenue 3 61,000 -61,000 4 -20,000 -20,000 Salaries expense 5 -2,320 -2,320 Bad debts expense Bal. 70000 29,000 -2320 96,680 A/R= 90,000-61000= 29000 % estimated 8% Bad debts expense 2320

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