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.

Exercise 7-7A Part d

d-1. Organize the transaction data in accounts under an accounting equation for Year 2. d-2. Prepare an income statement for Year 2. d-3. Prepare the statement of changes in stockholders' equity for Year 2. d-4. Prepare the balance sheet for Year 2. d-5. Prepare the statement of cash flows for Year 2. d-6. What is the net realizable value of the accounts receivable at December 31, Year 2?

LEACH INC.

Accounting Equation for the Year 2

Event

Assets

=

Liabilities

+

Equity

Accounting Titles for Retained Earnings

Cash

+

Accounts Receivable

Allowance

Common stock

+

Retained Earnings

Bal.

+

=

+

+

1.

+

=

+

+

2.

+

=

+

+

3.

+

=

+

+

4.

+

=

+

+

5.

+

=

+

+

6.

+

=

+

+

Bal.

0

+

0

0

=

0

+

0

+

0

LEACH INC.
Income Statement
For the Year Ended December 31, Year 2
Operating expenses
Total operating expenses		0

LEACH INC.
Statement of Changes in Stockholders Equity
For the Year Ended December 31, Year 2
Beginning common stock
Ending common stock		$0
Beginning retained earnings
Ending retained earnings		0
Total stockholders equity		$0

LEACH INC.
Balance Sheet
As of December 31, Year 2
Assets
		0
Total assets		$0
Liabilities
Stockholders equity
Total stockholders equity		0
Total liabilities and stockholders equity		$0

LEACH INC.
Statement of Cash Flows
For the Year Ended December 31, Year 2
Cash flows from operating activities
Net cash flow from operating activities		$0
Cash flows from investing activities
Cash flows from financing activities
Net change in cash		0
Ending cash balance		$0

Net realizable value