Question
Exercise 7-7A (Algo) Effect of recognizing uncollectible accounts on the financial statements: Percent of receivables allowance method LO 7-2 Skip to question [The following information
Exercise 7-7A (Algo) Effect of recognizing uncollectible accounts on the financial statements: Percent of receivables allowance method LO 7-2
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[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:
Issued $10,000 of common stock for cash.
Provided $70,000 of services on account.
Provided $25,000 of services and received cash.
Collected $45,000 cash from accounts receivable.
Paid $20,000 of salaries expense for the year.
Adjusted the accounting records to reflect uncollectible accounts expense for the year. Leach estimates that 7 percent of the ending accounts receivable balance will be uncollectible.
Year 2:
Wrote off an uncollectible account for $2,590.
Provided $90,000 of services on account.
Provided $20,000 of services and collected cash.
Collected $72,000 cash from accounts receivable.
Paid $22,000 of salaries expense for the year.
Adjusted the accounts to reflect uncollectible accounts expense for the year. Leach estimates that 7 percent of the ending accounts receivable balance will be uncollectible.
Exercise 7-7A (Algo) Part d
d-1. Organize the transaction data in accounts under an accounting equation for Year 2.
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?
Organize the transaction data in accounts under an accounting equation for Year 2. Note: Enter any decreases to account balances with a minus sign. Not all cells require input. Round your intermediate calculations and final answer to th nearest whole dollar. Prepare an income statement for Year 2. Note: Round your intermediate calculations and final answers to the nearest whole dollar. Prepare the statement of changes in stockholders' equity for Year 2. Note: Round your intermediate calculations and final answers to the nearest whole dollar. Prepare the balance sheet for Year 2 . Note: Round your intermediate calculations and final answers to the nearest whole dollar. Prepare the statement of cash flows for Year 2. Note: Amounts to be deducted and cash outflows should be indicated with a minus sign. d-1. Organize the transaction data in accounts under an accounting equation for Year 2 . 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. What is the net realizable value of the accounts receivable at December 31 , Year 2? Note: Round your intermediate calculations and final answer to the nearest whole dollarStep by Step Solution
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