Exercise 5-9 Effect of recognizing uncollectible accounts on the financial statements: Percent of receivables allowance method LO 5-2 The following information applies to the questions displayed below. Leach Inc. experienced the following events for the first two years of its operations: 2018 1. Issued $10,000 of common stock for cash. 2. Provided $90,000 of services on account. 3. Provided $33,000 of services and received cash 4. Collected $57,000 cash from accounts receivable 5. Paid $14,000 of salaries expense for the year. 6. Adjusted the accounting records to reflect uncollectible accounts expense for the year. Leach estimates that 8 percent of the ending accounts receivable balance will be uncollectible. 2019 Wrote off an uncollectible account for $670 2. Provided $110,000 of services on account. 3. Provided $20,000 of services and collected cash 4. Collected $92,000 cash from accounts receivable. 5. Paid $22,000 of salaries expense for the year. 6. Adjusted the accounts to reflect uncollectible accounts expense for the year. Leach estimates that 8 percent of the ending accounts receivable balance will be uncollectible. Stmt Reg B Stmt SE ea B Bal Prepare an income statement for 2018. Sheet Cash Flows LEACH INC. Income Statement For the Year Ended December 31, 2018 Operating expenses Total operating expenses StmtReq B Stmt SER BBReq B Stmt Cash Flows Sheet Prepare the statement of changes in stockholders' equity for 2018. LEACH INC. Statement of Changes in Stockholders' Equity For the Year Ended December 31, 2018 Beginning common stock Ending common stock Beginning retained earnings Ending retained earnings Total stockholders' equity Req B Inc Stmt Req B Bal Sheet> Req B IncReg B Stmt SE Req B BalReq B Stmt Cash Flows Sheet Prepare the balance sheet for 2018. LEACH INC. Balance Sheet As of December 31, 2018 Assets Total assets Liabilities Stockholders' equity Total stockholders' equity Total liabilities and stockholders' equity