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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 $80,000
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 $80,000 of services on account.
- Provided $35,000 of services and received cash.
- Collected $45,000 cash from accounts receivable.
- Paid $18,000 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 $670.
- Provided $100,000 of services on account.
- Provided $25,000 of services and collected cash.
- Collected $82,000 cash from accounts receivable.
- Paid $30,000 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.
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?
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