ACCT $2101$ : Exercise $7-5$A $($Algo$)$ Analyzing financial statement effects of accounting for uncollectible accounts using the percent of revenue allowance method LO $7-1.$

Grover Incorporated uses the allowance method to account for uncollectible accounts expense. Grover Incorporated experienced the following four accounting events in Year $1$:

Recognized $$83,000$ of revenue on account.

Collected $$77,000$ cash from accounts receivable.

Wrote off uncollectible accounts of $$1,250.$

Recognized uncollectible accounts expense. Grover estimated that uncollectible accounts expense will be $3$ percent of sales on account.

Required:

a$.$ Show the effect of each event on the elements of the financial statements, using a horizontal statements model like the one shown next. The first transaction is entered as an example.

Note: Use $+$ for increase, $$ for decrease, or $+/$ for increase and decrease. In the Statement of Cash Flows column, indicate whether the item is an operating activity $($OA$),$ investing activity $($IA$),$ or financing activity $($FA$).$ Not all cells will require input.