Question

Required information [The following information applies to the questions displayed below.) 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 $60,000 of services on account. 3. Provided $29,000 of services and received cash. 4. Collected $31,000 cash from accounts receivable. 5. Paid $14,000 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. 2019: 1. Wrote off an uncollectible account for $730. 2. Provided $80,000 of services on account. 3. Provided $25,000 of services and collected cash. 4. Collected $62,000 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 6 percent of the ending accounts receivable balance will be uncollectible. b. Prepare an income statement, statement of changes in stockholders' equity, balance sheet, and statement of cash flows for 2018. Complete this question by entering your answers in the tabs below. Req B Inc Req B Req B Bal Req B Stmt Stmt SE Sheet Stmt Prepare an income statement for 2018. LEACH INC. Income Statement For the Year Ended December 31, 2018 Operating expenses Total operating expenses Reg B Inc Stmt Req B Stmt SE >

Answer 1

Answer is given below with working

$89,000 ($60,000+$29,000) LEACH INC. Income Statements For the year Ended December 31, 2018 Service Revenue Operating expenses Salaries expense Uncollectible Accounts expense Net Income -$14,000 -$1,740 $73,260 Working notes: Uncollectible Accounts expense Closing balance of Accounts Receivable 6% of above uncollectible Accounts Receivable (net)- Closing balance $29,000 $60,000-$31,000 $1,740 $27,260 | LEACH INC. Statement of changes in Stockholders' Equity For the year Ended December 31, 2018 Opening Balance Add: Net Income during the year Closing balance $73,260 $73,260 LEACH INC. Balance Sheet As of year Ended December 31, 2018 Assets Cash Accounts Receivable Total Assets Liabilities and Equity Stockholders' equity Common stock Retained earnings Total Liabilities and Stockholders' Equity $56,000 $27,260 $83,260 $10,000 $73,260 $83,260 LEACH INC. Statement of Cash flows As of year Ended December 31, 2018 Cash flow from Operating Activities Cash Sales Cash collected from Customers Total Cash Receipts Cash paid for operating expense Net cash flow from operating activities Cash flow from Financing activities Issuance of Common Stock Net Increase in Cash Beginning cash balance Closing cash balance $29,000 $31,000 $60,000 -$14,000 $46,000 $10,000 B $56,000 A+B $56,000