Posey Service Co. experienced the following transactions for 2011, its first year of operations:

1. Provided $72,000 of services on account.

2. Collected $56,000 cash from accounts receivable.

3. Paid $30,000 of salaries expense for the year.

4. Posey adjusted the accounts using the following information from an accounts receivable aging schedule.

Required
a. Organize the information in accounts under an accounting equation.
b. Prepare the income statement for Posey Service Co. for 2011.
c. What is the net realizable value of the accounts receivable at December 31,2011?

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Number of Days Percent Likely to Be Uncollectible Allowance Balance Past Due Amount Current 0-30 31-60 61-90 Over 90 days S12,000 2,000 500 500 1,000 01 .05 .10 30