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Required information Exercise 7-7A (Algo) Effect of recognizing uncollectible occounts on the financlal statements: percent of recelvables allowance method LO 7.2 [The followng information apphes to the questions displayed below] Leach Incorporated experlenced the following events for the first two years of its operations. Year 1: 1. Issued $13,000 of common stock for cash. 2. Provided $81,300 of servees on account. 3. Provided $39,000 of semces and recelved cash. 4. Collected $72,000 cash from accounts recelvable. 5. Pald $41,000 of salanies expense for the year. 6. Adjusted the accounting records to reflect uncollectible accounts expense for the yeac Leach estimates that 5 percent of the ending accounts recelvable balance will be uncollectible. 7. Closed the revenue account. 8. Closed the expense accounts, Year 2 1. Wrote off an uncollectible account for $800. 2 Provided $91,000 of services on account. 3. Provided $35,000 of services and collected cash. 4. Collected $84,000 cash from accounts recelvable. 5. Paid $68,000 of salaries expense for the year. 6. Adjusted the accounts to reflect uncollectible accounts expense for the year. Leach estimates that 5 percent of the ending accounts recelvable balance will be uncollectible. 7. Closed the revenue account. 8. Closed the expense accounts. Exerclse 7.7A (Algo) Part c c. What is the net realizable value of the accounts recelvable at December 31 , Year 1

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