Exercise 5-9A (Algo) 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: Year 1: 1. Issued $10,000 of common stock for cash. 2. Provided $70,000 of services on account. 3. Provided $31,000 of services and received cash. 4. Collected $39,000 cash from accounts receivable. 5. Paid $18,000 of salaries expense for the year. 6. Adjusted the accounting records to reflect uncollectible accounts expense for the year. Leach estimates that 6 percent of the ending accounts receivable balance will be uncollectible. Year 2: 1. Wrote off an uncollectible account for $660. 2. Provided $90,000 of services on account. 3. Provided $20,000 of services and collected cash. 4. Collected $72,000 cash from accounts receivable. 5. Paid $24,000 of salaries expense for the year. 6. Adjusted the accounts to reflect uncollectible accounts expense for the year. Leach estimates that 6 percent of the ending accounts receivable balance will be uncollectible. Exercise 5-9A (Algo) Part d d-1. Organize the transaction data in accounts under an accounting equation. d-2. Prepare an income statement for Year 2. d-3. Prepare the statement of changes in stockholders' equity for Year 2. d-4. Prepare the balance sheet for Year 2. d-5. Prepare the statement of cash flows for Year 2. d-6. What is the net realizable value of the accounts receivable at December 31, Year 2? Complete this question by entering your answers in the tabs below. Reg D1 Req D2 Req D3 Req D4 Reg D5 Reg D6 Organize the transaction data in accounts under an accounting equation. (Enter any decreases to account balances with a minus sign. If there is no effect on the Accounts Titles for Retained Earnings, leave the cell blank. Round your answers to the nearest whole dollar.) LEACH INC. Accounting Equation for the Year 2 Equity Liabilities Common Stock Event Assets NRV Cash Accounts Receivable 62,000+ 29,140 = + + + Bal. 10,000+ 0+ 0 + 1. + 0 = 0 + + 90,000 = = 0 + 2. 3. 0+ 0 + Accounting Titles for Retained Retained Earnings Earnings 81,140 0 90,000 Service revenue 20,000 Service revenue 0 (24,000) Salaries expense 0 X Uncollectible accounts expense 167,140 0 = 0 + 4. 20,000+ 72,000 (24,000) + + 0+ 0 + (72,000) = 0 = 5. 0 + 0 + 6. 0 + 0X = 0+ 0+ Bal. 130,000 + 47,140 = 0 + 10,000 +