Year 1:

1. Issued $10,000 of common stock for cash.
2. Provided $60,000 of services on account.
3. Provided $35,000 of services and received cash.
4. Collected $25,000 cash from accounts receivable.
5. Paid $18,000 of salaries expense for the year.
6. Adjusted the accounting records to reflect uncollectible accounts expense for the year. Leach estimates that 7 percent of the ending accounts receivable balance will be uncollectible.

Year 2:

1. Wrote off an uncollectible account for $660.
2. Provided $80,000 of services on account.
3. Provided $20,000 of services and collected cash.
4. Collected $62,000 cash from accounts receivable.
5. Paid $26,000 of salaries expense for the year.
6. Adjusted the accounts to reflect uncollectible accounts expense for the year. Leach estimates that 7 percent of the ending accounts receivable balance will be uncollectible.

LEACH INC.

Accounting Equation for the Year 1

Event

Assets

=

Liabilities

+

Equity

Accounting Titles for Retained Earnings

Cash

+

Accounts Receivable

Allowance

Common stock

+

Retained Earnings

1.

+

=

+

+

2.

+

=

+

+

3.

+

=

+

+

4.

+

=

+

+

5.

+

=

+

+

6.

+

=

+

+

Bal.

+

=

+

+