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Leach Inc. 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
Leach Inc. 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 $35,000 of services and received cash.
- Collected $35,000 cash from accounts receivable.
- Paid $14,000 of salaries expense for the year.
- 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:
- Wrote off an uncollectible account for $2,630.
- Provided $90,000 of services on account.
- Provided $20,000 of services and collected cash.
- Collected $72,000 cash from accounts receivable.
- Paid $20,000 of salaries expense for the year.
- Adjusted the accounts to reflect uncollectible accounts expense for the year. Leach estimates that 5 percent of the ending accounts receivable balance will be uncollectible.
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