Required Information Exercise 7-7A (Algo) Effect of recognizing uncollectible accounts on the financial statements: percent of receivables allowance method LO 7-2 [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: 1. Issued $13,000 of common stock for cash. 2. Provided $81,300 of services on account. 3. Provided $39,000 of services and received cash. 4. Collected $72,000 cash from accounts receivable. 5. Pald $41,000 of salaries expense for the year. 6. 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. 7. Closed the revenue account. 8. Closed the expense accounts. Year 2 1. Wrote off an uncollectible account for $800. 2. Provided $91,000 of services on account. 3. Provided $35,000 of services and collected cash. 4. Collected $84,000 cash from accounts receivable. 5. Pald $68,000 of salaries expense for the year 6. 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 7. Closed the revenue account 8. Closed the expense accounts Exercise 7-7A (Algo) Part d d. Record the Year 2 events in general journal form and post them to T-accounts. Prepare the income statement, statement of changes In stockholders equity, balance sheet, and statement of cash flows for Year 2. What is the net realizable value of the accounts receivable at December 31, Year 2 Complete this question by entering your answers in the tabs below. Req D1 Req D2 Req D3 Req D4 Req D5 Req D6 Req D7 Record the Year 2 events in general journal form. (If no entry is required for a transaction/event, select "No jou the first account field. Round your answers to the nearest whole dollar amounts.) View transaction let Journal entry worksheet < A B C D E F G H Wrote off an uncollectible account for $800. Record the entry. Note: Enter debits before credits. Transaction Gene Journal Debit Credit Record entry Clear entry Journal entry worksheet < A B C D E F G H Provided $91,000 of services on account. Record the entry. Note: Enter debits before credits. Transaction 2 General Journal Debit Credit Record entry Clear entry View general journal Req D1 Req D2 > < A B C D E F G H Provided $35,000 of services and collected cash. Record the entry. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journal Req D1 Req D2 > entry worksheet < A B C D E F G H Collected $84,000 cash front accounts receivable. Record the entry. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry > < A B C D Jh F G H > Paid $68,000 of salaries expense for the year. Record the entry. Note: Enter debits before credits. Transaction 5 General Journal Debit Credita Record entry Clear entry View general Journal Journal entry worksheet < A B D E LL F G H 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. Record the entry. Note: Enter debits before credits. Transaction 6 General Journal Debit Credit Record entry Clear entry View general Journal Journal entry worksheet < A B C D E LL F Record the entry to close the revenue account. Note: Enter debits before credits. Transaction 7 G 13 H General Journal Debit Credit Record entry Clear entry Journal entry worksheet < A B C D E F G Record the entry to close the expense accounts. Note: Enter debits before credits. Transaction 8 H General Journal Debit Credit Record entry Clear entry Req D1 Req D2 Req D3 Req D4 Req D5 Req D6 Req D7 Post the Year 2 events to T-accounts. (Round your answers to the nearest whole dollar amounts.) Beginning Balance Cash Common Stock Beginning Balance Ending Balance Ending Balance Accounts Receivable Service Revenue Beginning Balance Beginning Balance Ending Balance Ending Balance Allowance for Doubtful Accounts Retained Earnings Beginning Balance Beginning Balance Ending Balance Ending Balance Salaries Expense Uncollectible Accounts Expense Beginning Balance Beginning Balance Ending Balance Ending Balance Req D3 > Prepare the income statement for Year 2. (Round your answers to the nearest whole dollar amounts.) LEACH INCORPORATED Income Statement For the Year Ended December 31, Year 2 Operating expenses Total operating expenses Reg D2 Rea D > Prepare the statement of changes in LEACH INCORPORATED Statement of Changes in Stockholders' Equity For the Year Ended December 31, Year 2 Total stockholders' equity Prepare the balance sheet for Year 2. (Enter amounts to be deducted with a minus sign. Round nearest whole dollar amounts.) LEACH INCORPORATED Balance Sheet As of December 31, Year 2 Assets Total assets Liabilities Stockholders' equity Total stockholders' equity Total liabilities and stockholders' equity < Req D4 Req D6 > LEACH INCORPORATED Statement of Cash Flows For the Year Ended December 31, Year 2 Cash flow 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 What is the net realizable value of the accounts receivable at C whole dollar amounts.) Net realizable value