Question

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Posted on Jul 28, 2024

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 $27,000 of services and received cash.
Collected $43,000 cash from accounts receivable.
Paid $22,000 of salaries expense for the year.
Adjusted the accounting records to reflect uncollectible accounts expense for the year. Leach estimates that 6 percent of the ending accounts receivable balance will be uncollectible.

Year 2:

Wrote off an uncollectible account for $730.
Provided $90,000 of services on account.
Provided $25,000 of services and collected cash.
Collected $72,000 cash from accounts receivable.
Paid $28,000 of salaries expense for the year.
Adjusted the accounts to reflect uncollectible accounts expense for the year. Leach estimates that 6 percent of the ending accounts receivable balance will be uncollectible.

Exercise 7-7A 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?

d-1.

Organize the transaction data in accounts under an accounting equation for Year 2. (Enter any decreases to account balances with a minus sign. Not all cells in the "Accounts Titles for Retained Earnings" column may require an input - leave cells blank if there is no corresponding Retained Earnings input needed.)

D-1.

LEACH INC.

Accounting Equation for the Year 2

Event

Assets

Liabilities

Equity

Accounting Titles for Retained Earnings

Cash

Accounts Receivable

Allowance

Common stock

Retained Earnings

Bal.

D2.

Prepare an income statement for Year 2. (Round your intermediate calculations and final answers to the nearest whole dollar.)

LEACH INC.
Income Statement
For the Year Ended December 31, Year 2

Operating expenses



Total operating expenses

D3.

Prepare the statement of changes in stockholders' equity for Year 2. (Round your intermediate calculations and final answers to the nearest whole dollar.)

LEACH INC.
Statement of Changes in Stockholders Equity
For the Year Ended December 31, Year 2
Beginning common stock

Ending common stock

Beginning retained earnings

Ending retained earnings
Total stockholders equity

D4.

Prepare the balance sheet for Year 2. (Round your intermediate calculations and final answers to the nearest whole dollar.)

LEACH INC.
Balance Sheet
As of December 31, Year 2
Assets
??
??
??
Total assets
Liabilities
Stockholders equity
??
??
??
Total stockholders equity
Total liabilities and stockholders equity

D5.

Prepare the statement of cash flows for Year 2. (Round your intermediate calculations and final answers to the nearest whole dollar. Amounts to be deducted should be indicated with a minus sign.)

LEACH INC.
Statement of Cash Flows
For the Year Ended December 31, Year 2
Cash flows from operating activities
??
??
??
Net cash flow from operating activities
Cash flows from investing activities
Cash flows from financing activities
Net change in cash
??
Ending cash balance

D6. What is the net realizable value of the accounts receivable at December 31, Year 2? (Round your intermediate calculations and final answer to the nearest whole dollar.)