Required information Exercise 7-7A 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 Inc. experienced the following events for the first two years of its operations: Year 1: 1. Issued $17,000 of common stock for cash. 2. Provided $85,700 of services on account 3. Provided $43,000 of services and received cash. 4. Collected $76,000 cash from accounts receivable 5. Paid $45,000 of salaries expense for the year 6. Adjusted the accounting records to reflect uncollectible accounts expense for the year. Leach estimates that 4 percent of the ending accounts receivable balance will be uncollectible 7. Closed the revenue account. 8. Closed the expense account. Year 2: 1. Wrote off an uncollectible account for $750 2. Provided $95,000 of services on account 3. Provided $39,000 of services and collected cash. 4. Collected $88,000 cash from accounts receivable 5. Paid $72,000 of salaries expense for the year 6. Adjusted the accounts to reflect uncollectible accounts expense for the year. Leach estimates that 4 percent of the ending accounts receivable balance will be uncollectible Exercise 7-7A Part c c. What is the net realizable value of the accounts receivable at December 31, Year 1? realizable value