Returnt 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 $90,000 of services on account. 3. Provided $29,000 of services and received cash. 4. Collected $61,000 cash from accounts receivable 5. Pald $20,000 of salaries expense for the year. 6. Adjusted the accounting records to reflect uncollectible accounts expense for the year. Leach estimates that 8 percent of the ending accounts receivable balance will be uncollectible. Year 2: 1. Wrote off an uncollectible account for $670. 2. Provided $110,000 of services on account 3. Provided $25,000 of services and collected cash. 4. Collected $92,000 cash from accounts receivable, 5. Pald $22.000 of salaries expense for the year. 6. Adjusted the accounts to reflect uncollectible accounts expense for the year Leach estimates that 8 percent of the ending accounts recolvable balance will be uncollectible. c. What is the net realizable value of the accounts receivable at December 31, Year 1? Answer is complete but not entirely correct. Not realizable S 80,000+ value