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 $$88,000$ of revenue on account.

Collected $$82,000$ cash from accounts receivable.

Wrote off uncollectible accounts of $$1,500.$

Recognized uncollectible accounts expense. Grover estimated that uncollectible accounts expense will be $2$ 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. In the Statement of Cash Flows column, indicate whether the item is an operating activity $($OA$),$ investing activity $($IA$),$ or financing activity $($FA$).$ The first transaction is entered as an example.

b$.$ Record the previous transactions in general journal form.

Complete this question by entering your answers in the tabs below.

Required A

Required $B$

Show the effect of each event on the elements of the financial statements, using a horizontal statements model. In the Statement of Cash Flows column item is an operating activity $($OA$),$ investing activity $($IA$),$ or financing activity $($FA$).$ The first transaction is entered as an example.