Question

2018:

1. Issued $10,000 of common stock for cash.
2. Provided $90,000 of services on account.
3. Provided $33,000 of services and received cash.
4. Collected $57,000 cash from accounts receivable.
5. Paid $16,000 of salaries expense for the year.
6. Adjusted the accounting records to reflect uncollectible accounts expense for the year. Leach estimates that 7 percent of the ending accounts receivable balance will be uncollectible.

2019:

1. Wrote off an uncollectible account for $750.
2. Provided $110,000 of services on account.
3. Provided $20,000 of services and collected cash.
4. Collected $92,000 cash from accounts receivable.
5. Paid $30,000 of salaries expense for the year.
6. Adjusted the accounts to reflect uncollectible accounts expense for the year. Leach estimates that 7 percent of the ending accounts receivable balance will be uncollectible.

1. d-1. Organize the transaction data in accounts under an accounting equation.
2. d-2. Prepare an income statement for 2019.
3. d-3. Prepare the statement of changes in stockholders' equity for 2019.
4. d-4. Prepare the balance sheet for 2019.
5. d-5. Prepare the statement of cash flows for 2019.
6. d-6. What is the net realizable value of the accounts receivable at December 31, 2019?

Reg Di Reg D2 Req D3 Req D4 Req D5 Req D6 Organize the transaction data in accounts under an accounting equation. (Enter any decreases to account balances with a minus sign. If there is no effect on the Accounts Titles for Retained Earnings, leave the cell blank.) LEACH INC. Accounting Equation for the Year 2019 Equity Liabilities Allowance Common Retained Allowance stock Earnings Event Assets Accounts Receivable Accounting Titles for Retained Earnings Cash + + + + + + + + + + + 1111 + + + + + + +

Answer 1

+ Leach Inc 2018 Assets Equity Account Titles for Events Cash Accounts Rec - Allowance = Liabilties + Common Stock + Retained Earnings Retained Earnings Calculation 10,000 10,000 + 90,000 90,000 Service Revenue 33,000 33,000 Service Revenue 57,000 (57,000) - (16,000) (16,000) Salaries expense 2,310 = (2,310) Uncollectible Account exp =33,000*7% Bal. 84,000 33,000 - 2,310 = 10,000 + 104,690 + uw + + + + + + + 2019 Assets Equity Events Cash Accounts Rec - Allowance = Liabilties + Common Stock + Retained Earnings Calculation Bal. 84,000 33,000 2,310 = 10,000 + 104,690 (750) - (750) = 110,000 110,000 Service Revenue 20,000 20,000 Service Revenue 92,000 (92,000) - (30,000) (30,000) Salaries expense 1,958 = (1,958) Uncollectible Account exp =(50,250*7%)-2,310+750 Bal. 166,000 50,250 - 3,518 = 10,000 + 202,733 IlIlIl + + + + + + + + +

130,000 Leach Inc Income Statement For year ended Dec 31, Year 2019 Service Revenue Operating expenses Salaries expense Uncollectible Accounts expense Total Operating expenses Net Income 30,000 1,958 31,958 98,043 Statement of Changes in Stockholders Equity For year ended Dec 31, Year 2019 Beginning common Stock Issue of common stock Ending common Stock 10,000 10,000 104,690 98,043 Beginning Retained Earnings Net Income Ending Retained Earnings Total Stockholders Equity 202,733 212,733

Leach Inc Balance Sheet As of Dec 31, Year 2019 Assets Cash Accounts Receivable Allowance for Uncollectible Accounts Accounts Receivable, Net Total Assets 166,000 50,250 (3,518) 46,733 212,733 Stockholders Equity Common Stock Retained Earnings Total Stockholders Equity Total Liabilities & Stockholders Equity 10,000 202,733 212,733 212,733 Net realizable value of Accts Rec 46,733

Leach Inc Statement of Cashflows - Direct Method For year ended Dec 31, Year 2019 Cashflows from operating activities Cash received from cash sales Cash received from credit sales Cash paid for salaries Net Cashflows from operating activities 20,000 92,000 (30,000) 82,000 Cashflows from investing activities Cashflows from financing activities Net change in cash Beginning cash balance Ending cash balance 82,000 84,000 166,000