Required information

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

$[$The following information applies to the questions displayed below.$]$

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

Year $1$:

Issued $$10,000$ of common stock for cash.

Provided $$78,000$ of services on account.

Provided $$36,000$ of services and received cash.

Collected $$69,000$ cash from accounts receivable.

Paid $$38,000$ 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.

Year $2$:

Wrote off an uncollectible account for $$650.$

Provided $$88,000$ of services on account.

Provided $$32,000$ of services and collected cash.

Collected $$81,000$ cash from accounts receivable.

Paid $$65,000$ 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.

Exercise $7-7$A $($Static$)$ Part c

c$.$ What is the net realizable value of the accounts receivable at December $31,$ Year $1?$

Net realizable value