Homework Chapter 7 Saved Help Save & Exit Submit Check my work 3 Patel Service Company does make a few sales on account but is mostly a cash business. Consequently, it uses the direct write-off method to account for uncollectible accounts. During Year 1, Patel Service Company earned $34,400 of cash revenue and $8,600 of revenue on account. Cash operating expenses were $25,395. After numerous attempts to collect a $288 account receivable from Sam Stephens, the account was determined to be uncollectible in Year 1. 4 points Required: a. Show the effects of (1) cash revenue, (2) revenue on account, (3) cash expenses, and (4) write off of the uncollectible account on 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). eBook b. What amount of net income did Patel Service Company report on the Year 1 income statement? Print Complete this question by entering your answers in the tabs below. References Required A Required B Show the effects of (1) cash revenue, (2) revenue on account, (3) cash expenses, and (4) write off of the uncollectible account on the financial statements using a horiz statements model. Note: Enter any decreases to account balances and cash outflows with a minus sign. For changes on the Statement of Cash Flows, indicate whether the item is an opera (OA), investing activity (IA), or financing activity (FA). Not all cells require input. PATEL SERVICE COMPANY Horizontal Statements Model Balance Sheet Income Statement Assets Event Statement of Cash Liabilities Stockholders' Revenue Flows NRV Equity Expense = Net Income Cash Accounts Receivable 1 1I + + 2 + + + + 3 + + 4 11 11 Balance + Mc Graw Hill