Exercise 7-7A (Algo) Effect of recognizing uncollectible accounts on the financial statements: Percent of receivables allowance method LO 7-2 [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: 1. Issued $10,000 of common stock for cash. 2. Provided $70,000 of services on account. 3. Provided $31,000 of services and received cash. 4. Collected $39,000 cash from accounts receivable. 5. Paid $20,000 of salaries expense for the year. 6. 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: 1. Wrote off an uncollectible account for $2,600. 2. Provided $90,000 of services on account. 3. Provided $30,000 of services and collected cash. 4. Collected $72,000 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 6 percent of the ending accounts receivable balance will be uncollectible. Exercise 7-7A (Algo) Part b b. Prepare the income statement, statement of changes in stockholders' equity, balance sheet, and statement of cash flows for Year 1. Complete this question by entering your answers in the tabs below. Req B Income Statement Req B Statement Stockholders Req B Balance Sheet Req B Statement Cash Flows Prepare an income statement for Year 1. LEACH INCORPORATED Income Statement For the Year Ended December 31, Year 1 Operating expenses Total operating expenses 0
Exercise 7-7A (Algo) Effect of recognizing uncollectible accounts on the financial statements: Percent of receivables allowance method LO 7-2 [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: 1. Issued $10,000 of common stock for cash. 2. Provided $70,000 of services on account. 3. Provided $31,000 of services and received cash. 4. Collected $39,000 cash from accounts receivable. 5. Paid $20,000 of salaries expense for the year. 6. 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: 1. Wrote off an uncollectible account for $2,600. 2. Provided $90,000 of services on account. 3. Provided $30,000 of services and collected cash. 4. Collected $72,000 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 6 percent of the ending accounts receivable balance will be uncollectible. Exercise 7-7A (Algo) Part b b. Prepare the income statement, statement of changes in stockholders' equity, balance sheet, and statement of cash flows for Year 1. Complete this question by entering your answers in the tabs below. Req B Income Statement Req B Statement Stockholders Req B Balance Sheet Req B Statement Cash Flows Prepare an income statement for Year 1. LEACH INCORPORATED Income Statement For the Year Ended December 31, Year 1 Operating expenses Total operating expenses 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![Exercise 7-7A (Algo) Effect of recognizing uncollectible accounts on the financial statements: Percent of
receivables allowance method LO 7-2
[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:
1. Issued $10,000 of common stock for cash.
2. Provided $70,000 of services on account.
3. Provided $31,000 of services and received cash.
4. Collected $39,000 cash from accounts receivable.
5. Paid $20,000 of salaries expense for the year.
6. 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:
1. Wrote off an uncollectible account for $2,600.
2. Provided $90,000 of services on account.
3. Provided $30,000 of services and collected cash.
4. Collected $72,000 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 6 percent of the
ending accounts receivable balance will be uncollectible.
Exercise 7-7A (Algo) Part b
b. Prepare the income statement, statement of changes in stockholders' equity, balance sheet, and statement of cash flows for Year 1.
Complete this question by entering your answers in the tabs below.
Req B Income
Statement
Req B
Statement
Stockholders
Req B Balance
Sheet
Req B
Statement
Cash Flows
Prepare an income statement for Year 1.
LEACH INCORPORATED
Income Statement
For the Year Ended December 31, Year 1
Operating expenses
Total operating expenses
0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F525160ef-b5ca-4838-a6fc-741d8056b794%2F591ee7b6-6836-42c4-968d-0a91b68529be%2Fn98eiti_processed.png&w=3840&q=75)
Transcribed Image Text:Exercise 7-7A (Algo) Effect of recognizing uncollectible accounts on the financial statements: Percent of
receivables allowance method LO 7-2
[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:
1. Issued $10,000 of common stock for cash.
2. Provided $70,000 of services on account.
3. Provided $31,000 of services and received cash.
4. Collected $39,000 cash from accounts receivable.
5. Paid $20,000 of salaries expense for the year.
6. 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:
1. Wrote off an uncollectible account for $2,600.
2. Provided $90,000 of services on account.
3. Provided $30,000 of services and collected cash.
4. Collected $72,000 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 6 percent of the
ending accounts receivable balance will be uncollectible.
Exercise 7-7A (Algo) Part b
b. Prepare the income statement, statement of changes in stockholders' equity, balance sheet, and statement of cash flows for Year 1.
Complete this question by entering your answers in the tabs below.
Req B Income
Statement
Req B
Statement
Stockholders
Req B Balance
Sheet
Req B
Statement
Cash Flows
Prepare an income statement for Year 1.
LEACH INCORPORATED
Income Statement
For the Year Ended December 31, Year 1
Operating expenses
Total operating expenses
0
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education