HW 5

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 $100,000 of services on account. 3. Provided $31,000 of services and received cash. 4. Collected $69,000 cash from accounts receivable. 5. Paid $22,000 of salaries expense for the year. 6. Adjusted the accounting records to reflect uncollectible accounts expense for the year. Leach estimates that 9 percent of the ending accounts receivable balance will be uncollectible. Year 2: 1. Wrote off an uncollectible account for $740. 2. Provided $120,000 of services on account. 3. Provided $30,000 of services and collected cash. 4. Collected $102,000 cash from accounts receivable. 5. Paid $28,000 of salaries expense for the year. 6. Adjusted the accounts to reflect uncollectible accounts expense for the year. Leach estimates that 9 percent of the ending accounts receivable balance will be uncollectible. Organize the transaction data in accounts under an accounting equation. (Enter any decreases to account balances with on the Accounts Titles for Retained Eamings, leave the cell blank. Not all cells will require entry.) Prepare the income statement for Year 1. Prepare the statement of changes in stockholders' equity for Year 1. Prepare the balance sheet for Year 1. Required information LEACH INC. Statement of Cash Flows For the Year Ended December 31, Year 1 Cash flows from operating activities 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 1