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 $28,000 of common stock for cash. 2. Provided $97,800 of services on account. 3. Provided $54,000 of services and received cash. 4. Collected $87,000 cash from accounts receivable. 5. Paid $56,000 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 $1,550. 2. Provided $106,000 of services on account. 3. Provided $50,000 of services and collected cash. 4. Collected $99,000 cash from accounts receivable. 5. Paid $83,000 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 b b. Prepare the income statement, statement of changes in stockholders' equity, balance sheet, and statement of cash flows for Year 1. Complete this question by entering your answers in the tabs below. Req B1 Req B2 Req 83 Req B4 Prepare the income statement for Year 1. LEACH INCORPORATED Income Statement For the Year Ended December 31, Year 1 Operating expenses Total operating expenses $ 0 Req B1 Req B2 > Exercise 7-7A (Algo) Part c c. What is the net realizable value of the accounts receivable at December 31, Year 1? Net realizable value 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 journal entry required" in the first account field. Round your answers to the nearest whole dollar amounts.) View transaction list Journal entry worksheet D G H Wrote off an uncollectible account for $1,550. Record the entry. Note: Enter debits before credits.