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 $10,000 of common stock for cash. 2. Provided $78,000 of services on account. 3. Provided $36,000 of services and received cash. 4. Collected $69,000 cash from accounts receivable. 5. Paid $38,000 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. Year 2: 1. Wrote off an uncollectible account for $650. 2. Provided $88,000 of services on account. 3. Provided $32,000 of services and collected cash. 4. Collected $81,000 cash from accounts receivable. 5. Paid $65,000 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. Fvercise 7-7A Part a Exercise 7-7A Part a Required a. Organize the transaction data in accounts under an accounting equation. (Enter any decreases to account balances with a min sign. Not all cells in the "Accounts Titles for Retained Earnings" column may require an input - leave cells blank if there is no corresponding Retained Earnings input needed.) LEACH INC. Accounting Equation for the Year 1 Equity Llabilities + Common Retained - Allowance stock Earnings Event Assets Accounts Receivable Accounting Titles for Retained Earnings Cash + Bal