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 $19,000 of common stock for cash. 2. Provided $87,900 of services on account. 3. Provided $45,000 of services and received cash. 4. Collected $78,000 cash from accounts receivable. 5. Paid $47,000 of salaries expense for the year. 6. Adjusted the accounting records to reflect uncollectible accounts expense for the year. Leach estimates that 3 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 $800. 2. Provided $97,000 of services on account. 3. Provided $41,000 of services and collected cash. 4. Collected $90,000 cash from accounts receivable. 5. Paid $74,000 of salaries expense for the year. 6. Adjusted the accounts to reflect uncollectible accounts expense for the year. Leach estimates that 3 percent of the ending accounts receivable balance will be uncollectible. Exercise 7-7A Part b b. Prepare the income statement, statement of changes in stockholders' equity, balance sheet, and statement of cash flows for Yea (Statement of Cash Flows and Balance Sheet only: Items to be deducted must be indicated with a minus sian.) LEACH INC. Required information 2 of 4 LEACH INC. Income Statement For the Year Ended December 31, Year 1 Operating expenses - Book Total operating expenses Print erences LEACH INC. Statement of Changes in Stockholders' Equity For the Year Ended December 31, Year 1 $ 0 . Total stockholders' equity S O