Required information Exercise 7-7A (Algo) Effect of recognizing uncollectible accounts on the financial statements: Percent of receivables allowance method LO 7-2 Skip to question [The following information applies to the questions displayed below.] Leach Incorporated 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 $25,000 of services and received cash. Collected $45,000 cash from accounts receivable. Paid $20,000 of salaries expense for the year. Adjusted the accounting records to reflect uncollectible accounts expense for the year. Leach estimates that 7 percent of the ending accounts receivable balance will be uncollectible. Year 2: Wrote off an uncollectible account for $2,590. Provided $90,000 of services on account. Provided $20,000 of services and collected cash. Collected $72,000 cash from accounts receivable. Paid $22,000 of salaries expense for the year. Adjusted the accounts to reflect uncollectible accounts expense for the year. Leach estimates that 7 percent of the ending accounts receivable balance will be uncollectible. Exercise 7-7A (Algo) Part a Required: a. Organize the transaction data in accounts under an accounting equation. Note: Enter any decreases to account balances with a minus sign. Not all cells require input.

Required: a. Organize the transaction data in accounts under an accounting equation. Note: Enter any decreases to account balances with a minus sign. Not all cells require input