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

2018:

1. Issued $10,000 of common stock for cash.
2. Provided $100,000 of services on account.
3. Provided $27,000 of services and received cash.
4. Collected $73,000 cash from accounts receivable.
5. Paid $18,000 of salaries expense for the year.
6. Adjusted the accounting records to reflect uncollectible accounts expense for the year. Leach estimates that 9 percent of the ending accounts receivable balance will be uncollectible.

2019:

1. Wrote off an uncollectible account for $730.
2. Provided $120,000 of services on account.
3. Provided $20,000 of services and collected cash.
4. Collected $102,000 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 9 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?

d-6. What is the net realizable value of the accounts receivable at December 31, 2019? Complete this question by entering your answers in the tabs below. Reg D1 Req D2 Req D3 Reg D4 Reg 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 + Common Retained Allowance stock " Earnings Event Assets Accounts * Receivable Accounting Titles for Retained Earnings Cash Bal. + + + + + + + + + + + + + + 0 = 0 + 0 + 0 < Reg Di ReqD2 >

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 + 100,000 100,000 Service Revenue 27,000 27,000 Service Revenue 73,000 (73,000) - (18,000) (18,000) Salaries expense 2,430 = (2,430) Uncollectible Accounts exp=27,000*9% 92,000 27,000 - 2,430 = 10,000 + 106,570 + uw + + Bal. 2019 Events Cash Bal. 92,000 + + + + + Assets Equity Accounts Rec - Allowance = Liabilties + Common Stock + Retained Earnings Calculation 27,000 2,430 10,000 + 106,570 (730) - (730) = 120,000 - 120,000 Service Revenue 20,000 Service Revenue (102,000) - (26,000) Salaries expense 2,284 = (2,284) Uncollectible Accounts exp =(44,270*9%)-2,430+730 44,270 - 3,984 = 10,000 + 218,286 + + 20,000 102,000 (26,000) + + + + + + Bal. 188,000 +

140,000 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 26,000 2,284 28,284 111,716 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 10,000 106,570 111,716 Beginning Retained Earnings Net Income Ending Retained Earnings Total Stockholders Equity 218,286 228,286

Leach Inc Balance Sheet As of Dec 31, Year 2019 Assets Cash Accounts Receivable Allowance for Uncollectible Accounts Accounts Receivable, Net Total Assets 188,000 44,270 (3,984) 40,286 228,286 Stockholders Equity Common Stock Retained Earnings Total Stockholders Equity Total Liabilities & Stockholders Equity 10,000 218,286 228,286 228,286 Net realizable value of Accts Rec 40,286

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 20,000 102,000 (26,000) 96,000 Cashflows from investing activities Cashflows from financing activities Net change in cash Beginning cash balance Ending cash balance 96.000 92,000 188.000

Calculation Leach Inc Statement of Cashflows - Indirect Method For year ended Dec 31, Year 2019 Cashflows from operating activities Net Income Changes in Working Capital Increase in Accounts Receivable Increase in Allowance for Uncollectible Accounts Net Cashflows from operating activities 111,716 (17,270) = 27,000-44,270 1,554 =3,984-2,430 96,000 Cashflows from investing activities Cashflows from financing activities Net change in cash Beginning cash balance Ending cash balance 96,000 92,000 188,000