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.
   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. Reg B Inc Reg B Stmt SE Req B Bal Sheet Req B Stmt Cash Flows Stmt Prepare an income statement for 2018. LEACH INC. Income Statement For the Year Ended December 31, 2018 Service revenue Operating expenses Total operating expenses
   

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 + + + + + + + + +

123,000 Leach Inc Income Statement For year ended Dec 31, Year 2018 Service Revenue Operating expenses Salaries expense Uncollectible Accounts expense Total Operating expenses Net Income 16,000 2.310 18,310 104,690 Statement of Changes in Stockholders Equity For year ended Dec 31, Year 2018 Beginning common Stock Issue of common stock Ending common Stock 10,000 10,000 104,690 Beginning Retained Earnings Net Income Ending Retained Earnings Total Stockholders Equity 104,690 114,690

Leach Inc Balance Sheet As of Dec 31, Year 2018 Assets Cash Accounts Receivable Allowance for Uncollectible Accounts Accounts Receivable, Net Total Assets 84,000 33,000 (2,310) 30,690 114,690 Stockholders Equity Common Stock Retained Earnings Total Stockholders Equity Total Liabilities & Stockholders Equity 10,000 104,690 114,690 114,690 Net realizable value of Accts Rec 30,690

Leach Inc Statement of Cashflows - Direct Method For year ended Dec 31, Year 2018 Cashflows from operating activities Cash received from cash sales Cash received from credit sales Cash paid for salaries Net Cashflows from operating activities 33,000 57,000 (16,000) 74,000 Cashflows from investing activities Cashflows from financing activities Inflow for issue of common stock Net change in cash Beginning cash balance Ending cash balance 10,000 84,000 84,000