eserdise 7-TA Fiftech recosticing uncollectible accounts on the financial statements:

percent of receivables allowance method

Least ne. experienced the following events for the fist two years of its operations:

Year 1:

1. Isued $10,000 of common stock for cash.
2. Provided $78,000 of services on account.

3, Provided $36,000 of services and received cash.

1. Collected $69,000 cash from accounts receivable.

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.

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 yest.
6. Adjusted the accounts to reflect uncollectel acaggnses sxpeose for the ger Las 5 percent of the ending accounts receivable Relents wili in piecellester

Required

1. Organize the transaction data in accounts under an accounting equatios.
2. Prepare the income statement, statement of changes in stockhoiders eguicy, balanee sheet, and statement of cash flows for Year 1.
3. What is the net realizable value of the accounts receivable at December 31, Year 1?
4. Repeat Requirements a, b, and c for Year 2.

Exercise 7-7A Effect of recognizing uncollectible accounts on the financial statements: percent of receivables allowance method Lach Inc, experienced the following events for the first two years of its operations: $10.000 of common stock for cash. ed $36,000 of services and received cash. 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. 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. Puid $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. Required 4. Organize the transaction data in accounts undic ay zconating equation. statement of cash flows for Year 1. c. What is the net realizable value of the gcesitsonts d. Repeat Requirements a,b, and c for Yea: Exercise 7-7A (parts A, C, D (parts A and C only for part D)) \begin{tabular}{|l|l|l|l|l|l|l|} \hline 1. & & & & & \\ \hline 2. & & & & & \\ \hline 3. & & & & & \\ \hline 4. & & & & & \\ \hline 5. & & & & \\ \hline 6. & & & & \\ \hline Balance & & & & & \\ \hline \end{tabular} \begin{tabular}{|l|l|} \hline Accts Rec, 12/31/ Year 2 & \\ \hline Allow Doubt Accts, 12/31/ Year 2 & \\ \hline Net Realizable Value, 12/31/ Year 2 & \\ \hline \end{tabular}