CH 7 . HW - 1 , Q 9

Chapter 7 Homework 1 i 9 Part 2 of 4 10 points Saved Required information [The following information applies to the questions displayed below.] Leach Incorporated experienced the following events for the first two years of its operations. Year 1: 1. Issued $10,000 of common stock for cash. 2. Provided $78,000 of services on account. 3. Provided $36,000 of services and received cash. 4. Collected $69,000 cash from accounts receivable. 5. Paid $38,000 of salaries expense for the year. 6. Adjusted the accounting records to reflect uncollectible accounts expense for the year. Leach estimates that 5 percent of the ending accounts receivable balance will be uncollectible. 7. Closed the revenue account. 8. Closed the expense accounts. Year 2: 1. Wrote off an uncollectible account for $650. 2. Provided $88,000 of services on account. 3. Provided $32,000 of services and collected cash. 4. Collected $81,000 cash from accounts receivable. 5. Paid $65,000 of salaries expense for the year. 6. Adjusted the accounts to reflect uncollectible accounts expense for the year. Leach estimates that 5 percent of the ending accounts receivable balance will be uncollectible. 7. Closed the revenue account. 8. Closed the expense accounts. eBook P Print References b. Prepare the income statement, statement of changes in stockholders' equity, balance sheet, and statement of cash flows for Year 1. Complete this question by entering your answers in the tabs below. Req B1 Req B2 Req B3 Req B4 Prepare the income statement for Year 1. LEACH INCORPORATED Income Statement For the Year Ended December 31, Year 1 Service revenue Operating expenses Salaries expense Allowance for doubtful accounts Total operating expenses Net income $ 88,000 0 $ 88,000 b. Prepare the income statement, statement of changes in stockholders' equity, balance sheet, and statement of cash flows for Year 1. Complete this question by entering your answers in the tabs below. Req B1 Req B2 Req B3 Req B4 Prepare the statement of changes in stockholders' equity for Year 1. LEACH INCORPORATED Statement of Changes in Stockholders' Equity For the Year Ended December 31, Year 1 Beginning common stock Plus: Common stock issued Ending common stock $ Beginning retained earnings Plus: Net income Ending common stock Total stockholders' equity $ GAGA $ 0 0 0 Req B1 Req B2 Req B3 Req B4 Prepare the balance sheet for Year 1. (Enter amounts to be deducted with a minus sign.) LEACH INCORPORATED Balance Sheet As of December 31, Year 1 Assets Cash Common stock 0 $ 0 0 $ 0 Total assets Liabilities Stockholders' equity Total stockholders' equity Total liabilities and stockholders' equity b. Prepare the income statement, statement of changes in stockholders' equity, balance shee Complete this question by entering your answers in the tabs below. Req B1 Req B2 Req B3 Req B4 Prepare the statement of cash flows for Year 1. (Enter cash outflows with a minus sign.) LEACH INCORPORATED Statement of Cash Flows For the Year Ended December 31, Year 1 Cash flow from operating activities: 0 Net cash flow from operating activities Cash flows from investing activities Cash flows from financing activities: Net change in cash 0 Ending cash balance 0 $ $