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Exercise $7-7$A $($Algo$)$ Effect of recognizing uncollectible accounts on the financial statements: percent of receivables allowance method $L07-2$

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Leach Incorporated experienced the following events for the first two years of its operations.

Year $1$:

Issued $$23,000$ of common stock for cash.

Provided $$92,300$ of services on account.

Provided $$49,000$ of services and received cash.

Collected $$82,000$ cash from accounts receivable.

Paid $$51,000$ of salaries expense for the year.

Adjusted the accounting records to reflect uncollectible accounts expense for the year. Leach estimates that $5$ percent of the ending accounts receivable balance will be uncollectible.

Closed the revenue account.

Closed the expense accounts.

Year $2$:

Wrote off an uncollectible account for $$1,300.$

Provided $$101,000$ of services on account.

Provided $$45,000$ of services and collected cash.

Collected $$94,000$ cash from accounts receivable.

Paid $$78,000$ of salaries expense for the year.

Adjusted the accounts to reflect uncollectible accounts expense for the year. Leach estimates that $5$ percent of the ending accounts receivable balance will be uncollectible.

Closed the revenue account.

Closed the expense accounts.

Exercise $7-7$A $($Algo$)$ Part a

Required

a$.$ Record the Year $1$ events in general journal form and post them to T$-$accounts.

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