Leach Inc. experienced the following events for the first two years of its operations: Year 1: Issued
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Question:
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 $80,000 of services on account.
- Provided $27,000 of services and received cash.
- Collected $53,000 cash from accounts receivable.
- Paid $20,000 of salaries expense for the year.
- Adjusted the accounting records to reflect uncollectible accounts expense for the year. Leach estimates that 6 percent of the ending accounts receivable balance will be uncollectible.
Year 2:
- Wrote off an uncollectible account for $700.
- Provided $100,000 of services on account.
- Provided $30,000 of services and collected cash.
- Collected $82,000 cash from accounts receivable.
- Paid $26,000 of salaries expense for the year.
- Adjusted the accounts to reflect uncollectible accounts expense for the year. Leach estimates that 6 percent of the ending accounts receivable balance will be uncollectible.
Required:
- 1. Organize the transaction data in accounts under an accounting equation.
- 2. Make the income statement, statement of changes in stockholders' equity, balance sheet, and statement of cash flows for Year 1.
- 3. What is the net realizable value of the accounts receivable at December 31, Year 1?
Related Book For
Survey Of Accounting
ISBN: 9781260575293
6th Edition
Authors: Thomas Edmonds, Christopher Edmonds, Philip Olds
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