Exercise 7-7A (Static) Effect of recognizing uncollectible accounts on the financial statements: Percent of receivables allowance method LO 7-2 The following information applles to the questions displayed below] Leach Incorporated experienced the following events for the first two years of its operations: Year 1: 1. Issued $10,000 of common stock for cosh. 2. Provided $78,000 of services on account. 3. Provided $36,000 of services and received cash. 4. Collected $59,000 cash from accounts recelvabie. 5. Paid $38,000 of salaries expense for the yeat. 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 year. 6. Adjusted the accounts to reflect uncollectible accounts expense for the year. Leach estimates that 5 percent of the ending occounts recelvable balance will be uncollectible. Exercise 7-7A (Static) Part c c. What is the net reatizable value of the occounts recelvable at December 31, Year 1