Exercise 7-7A (Algo) Effect of recognizing uncollectible accounts on the financial statements: percent of receivables allowance method LO 7-2 [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 $30,000 of common stock for cash. 2. Provided $100,000 of services on account. 3. Provided $56,000 of services and received cash. 4. Collected $89,000 cash from accounts receivable. 5. Paid $58,000 of salaries expense for the year. 6. Adjusted the accounting records to reflect uncollectible accounts expense for the year. Leach estimates that 4 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 $1,650. 2. Provided $108,000 of services on account. 3. Provided $52,000 of services and collected cash. 4. Collected $101,000 cash from accounts receivable. 5. Paid $85,000 of salaries expense for the year. 6. Adjusted the accounts to reflect uncollectible accounts expense for the year. Leach estimates that 4 percent of the ending accounts receivable balance will be uncollectible. 7. Closed the revenue account. 8. Closed the expense accounts. Exercise 7-7A (Algo) Part b 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. Prepare the statement of cash flows for Year 1. (Enter cash outflows with a minus sign.) Exercise 7-7A (Algo) Effect of recognizing uncollectible accounts on the financial statements: percent of receivables allowance method LO 7-2 [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 $30,000 of common stock for cash. 2. Provided $100,000 of services on account. 3. Provided $56,000 of services and received cash. 4. Collected $89,000 cash from accounts receivable. 5. Paid $58,000 of salaries expense for the year. 6. Adjusted the accounting records to reflect uncollectible accounts expense for the year. Leach estimates that 4 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 $1,650. 2. Provided $108,000 of services on account. 3. Provided $52,000 of services and collected cash. 4. Collected $101,000 cash from accounts receivable. 5. Paid $85,000 of salaries expense for the year. 6. Adjusted the accounts to reflect uncollectible accounts expense for the year. Leach estimates that 4 percent of the ending accounts receivable balance will be uncollectible. 7. Closed the revenue account. 8. Closed the expense accounts. Exercise 7-7A (Algo) Part c c. What is the net realizable value of the accounts receivable at December 31 , Year 1