Leach Inc. experienced the following events for the first two years of its operations: Year 1: Issued $10,000 of common stock for cash. Provided $70,000 of services on account. Provided $29,000 of services and received cash. Collected $41,000 cash from accounts receivable. Paid $22,000 of salaries expense for the year. 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: Wrote off an uncollectible account for $730. Provided $90,000 of services on account. Provided $25,000 of services and collected cash. Collected $72,000 cash from accounts receivable. Paid $22,000 of salaries expense for the year. 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.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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 $70,000 of services on account.
  3. Provided $29,000 of services and received cash.
  4. Collected $41,000 cash from accounts receivable.
  5. Paid $22,000 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 $730.
  2. Provided $90,000 of services on account.
  3. Provided $25,000 of services and collected cash.
  4. Collected $72,000 cash from accounts receivable.
  5. Paid $22,000 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. 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 $70,000 of services on account.
3. Provided $29,000 of services and received cash.
4. Collected $41.000 cash from accounts receivable.
5. Paid $22,000 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 $730.
2. Provided $90,000 of services on account.
3. Provided $25,000 of services and collected cash.
4. Collected $72.000 cash from accounts receivable.
5. Paid $22,000 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.
d-1. Organize the transaction data in accounts under an accounting equation.
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?
Transcribed Image Text: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 $70,000 of services on account. 3. Provided $29,000 of services and received cash. 4. Collected $41.000 cash from accounts receivable. 5. Paid $22,000 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 $730. 2. Provided $90,000 of services on account. 3. Provided $25,000 of services and collected cash. 4. Collected $72.000 cash from accounts receivable. 5. Paid $22,000 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. d-1. Organize the transaction data in accounts under an accounting equation. 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?
Reg D1
Reg D2
Reg D3
Reg D4
Req D5
Req D6
Organize the transaction data in accounts under an accounting equation. (Enter any decreases to account balances with a minus sign. If there is no effect
on the Accounts Titles for Retained Earnings, leave the cell blank. Round your answers to the nearest whole dollar.)
LEACH INC.
Accounting Equation for the Year 2
Assets
Equity
Accounting Titles for Retained
Earnings
Event
NRV Accounts
Liabilities
Common
Retained
Cash
Receivable
Stock
Earnings
Bal.
94,000 +
28,830 =
112,830
1.
2.
120,000 =
120,000 Service revenue
30,000+
30,000 Service revenue
3.
4.
102,000 +
(102,000) =
5.
(24,000) +
(24,000) Salaries expense
6.
(3,383)
(3,383) Other operating expenses
Bal.
202,000 +
43,447|=
235,447
< Req D1
Req D2 >
+++
++
+ ++ ++ + +
Transcribed Image Text:Reg D1 Reg D2 Reg D3 Reg D4 Req D5 Req D6 Organize the transaction data in accounts under an accounting equation. (Enter any decreases to account balances with a minus sign. If there is no effect on the Accounts Titles for Retained Earnings, leave the cell blank. Round your answers to the nearest whole dollar.) LEACH INC. Accounting Equation for the Year 2 Assets Equity Accounting Titles for Retained Earnings Event NRV Accounts Liabilities Common Retained Cash Receivable Stock Earnings Bal. 94,000 + 28,830 = 112,830 1. 2. 120,000 = 120,000 Service revenue 30,000+ 30,000 Service revenue 3. 4. 102,000 + (102,000) = 5. (24,000) + (24,000) Salaries expense 6. (3,383) (3,383) Other operating expenses Bal. 202,000 + 43,447|= 235,447 < Req D1 Req D2 > +++ ++ + ++ ++ + +
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