70.2K

Verified Solution

Link Copied!

Leach Incorporated experienced the following events for the first two years of its operations. Year 1: 1. Issued $29,000 of common stock for cash. 2. Provided $98,900 of services on account. 3. Provided $55,000 of services and received cash. 4. Collected $88,000 cash from accounts receivable. 5. Paid $57,000 of salaries expense for the year. 6. 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. (% of receivables method) 7. Closed the revenue account. 8. Closed the expense accounts. Year 2: 1. Wrote off an uncollectible account for $1,600. 2. Provided $107,000 of services on account. 3. Provided $51,000 of services and collected cash. 4. Collected $100,000 cash from accounts receivable. 5. Paid $84,000 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 receivable balance will be uncollectible. (% of receivables method) 7. Closed the revenue account. 8. Closed the expense accounts. Issued $29,000 of common stock for cash. Record the entry. Note: Enter debits before credits. Transaction 1 General Journal Debit Credit Provided $98,900 of services on account. Record the entry. Note: Enter debits before credits. Transaction 2 General Journal Debit Credit Provided $55,000 of services and received cash. Record the entry. Note: Enter debits before credits. Transaction 3 General Journal Debit Credit Collected $88,000 cash from accounts receivable. Record the entry. Note: Enter debits before credits. Transaction General Journal Debit Credit Paid $57,000 of salaries expense for the year. Record the entry. Note: Enter debits before credits. Transaction 5 General Journal Debit Credit 3. 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. Record the entry. Note: Enter debits before credits. Transaction 6 General Journal Debit Credit Record the entry to close the revenue account. Note: Enter debits before credits. Transaction 7 General Journal Debit Credit Record the entry to close the expense accounts. Note: Enter debits before credits. Transaction 8 General Journal Debit Credit Prepare the income statement for Year 1. LEACH INCORPORATED Income Statement For the Year Ended December 31, Year 1 Operating expenses Total operating expenses 0 $ 0 Prepare the statement of changes in stockholders' equity for Year 1. LEACH INCORPORATED Statement of Changes in Stockholders' Equity For the Year Ended December 31, Year 1 $ 0 0 Total stockholders' equity $ 0 Prepare the balance sheet for Year 1. (Enter amounts to be deducted with a minus sign.) LEACH INCORPORATED Balance Sheet As of December 31, Year 1 Assets Total assets Liabilities Stockholders' equity Total stockholders' equity Total liabilities and stockholders' equity 0 $ 0 $ 0 c. What is the net realizable value of the accounts receivable at December 31, Year 1? Net realizable value Record the Year 2 events in general journal form. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole dollar amounts.) View transaction list Journal entry worksheet A B C D E F G H Wrote off an uncollectible account for $1,600. Record the entry. Note: Enter debits before credits. Transaction 1 General Journal Debit Credit Record the Year 2 events in general journal form. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole dollar amounts.) View transaction list Journal entry worksheet < A B CDEFGH Provided $107,000 of services on account. Record the entry. Note: Enter debits before credits. Transaction 2 General Journal Debit Credit Record the Year 2 events in general journal form. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole dollar amounts.) View transaction list Journal entry worksheet A B C DEFGH Provided $51,000 of services and collected cash. Record the entry. Note: Enter debits before credits. Transaction 3 General Journal Debit Credit Record the Year 2 events in general journal form. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole dollar amounts.) View transaction list Journal entry worksheet Record the Year 2 events in general journal form. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole dollar amounts.) View transaction list Journal entry worksheet < A B C D E F GH Paid $84,000 of salaries expense for the year. Record the entry. Note: Enter debits before credits. Transaction 5 General Journal Debit Credit Record the Year 2 events in general journal form. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole dollar amounts.) View transaction list Journal entry worksheet A B C D E F G H 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. Record the entry. Note: Enter debits before credits. Transaction 6 General Journal Debit Credit Record the Year 2 events in general journal form. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole dollar amounts.) View transaction list Journal entry worksheet > A B C D E F Record the entry to close the revenue account. G H Note: Enter debits before credits. Transaction 7 General Journal Debit Credit Record the Year 2 events in general journal form. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole dollar amounts.) View transaction list Journal entry worksheet A B C D E F H Record the entry to close the expense accounts. Note: Enter debits before credits. Transaction 8 General Journal Debit Credit Post the Year 2 events to T-accounts. (Round your answers to the nearest whole dollar amounts.) Beginning Balance Cash Common Stock Beginning Balance Ending Balance Ending Balance Accounts Receivable. Service Revenue Beginning Balance Beginning Balance Ending Balance Ending Balance Allowance for Doubtful Accounts Retained Earnings Beginning Balance Beginning Balance Ending Balance Ending Balance Salaries Expense Uncollectible Accounts Expense Beginning Balance Beginning Balance Prepare the income statement for Year 2. (Round your answers to the nearest whole dollar amounts.) LEACH INCORPORATED Income Statement For the Year Ended December 31, Year 2 Operating expenses Total operating expenses 10 $ 0 0 Prepare the statement of changes in stockholders' equity for Year 2. LEACH INCORPORATED Statement of Changes in Stockholders' Equity For the Year Ended December 31, Year 2 $ 0 $ 0 Total stockholders' equity $ 0 Prepare the balance sheet for Year 2. (Enter amounts to be deducted with a minus sign. Round your answers to the nearest whole dollar amounts.) LEACH INCORPORATED Balance Sheet As of December 31, Year 2 Assets Total assets Liabilities Stockholders' equity Total stockholders' equity Total liabilities and stockholders' equity 0 $ 0 0 $ What is the net realizable value of the accounts receivable at December 31, Year 2? (Round your answer to the nearest whole dollar amounts.) Net realizable value

Answer & Explanation Solved by verified expert

See Answer