Question

Year 1: 1. Issued $10,000 of common stock for cash. 2. Provided $90,000 of services on account 3. Provlded $29,000 of services and receivedl cash. 4. Collocted $61.000 cash from eccounts reccivable. 5. Paid $18,000 of salaries expense for the ycar 6. Adjusted the accounting records to retlect uncollectible accounts expense for the year. Leach estimates that 5 percent of the ending accounts recelvable balance will be uncollectible Year 2: 1. Wrote off an uncollectible account for $750. Provided $110,000 of serves an account 3. Provlded $25,000 of services and collected cash. 4. Collected $92,000 cash from accounts recelvable 5. Paid $24,000 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 wil be uncollectible Required sign. Select "NA" if there is no effect on the "Accounts Titles for Retained Earnings" Accounting Equation for the Year 1 Accounting itles for Retained Liabilities Common+ Coah Accounts 1497, 330px 1912 x 825px 100% 342 PM O Type here to search

Answer 1

Leach Inc,
Accounting equation for the year 1
Event	Assets			Liabilities	Equity		Account title for retained earnings
	Cash	Account receivable	Allowance		Common stock	Retained earnings
1	$   10,000				$ 10,000		NA
2		$       90,000				$   90,000	Service Revenue
3	$   29,000					$   29,000	Service Revenue
4	$   61,000	$     (61,000)					NA
5	$ (18,000)					$ (18,000)	Salaries Expense
6			$            1,450			$   (1,450)	Bad debts expense (Also known as "Uncollectable expense")
Bal.	$   82,000	$       29,000	$            1,450	$                -	$ 10,000	$   99,550

hint:

Leach Inc,
Journal entries
Event	General Journal	Debit	Credit
1	Cash	10,000
	Common stock		10,000
	(To record cash received from issued of common stock.)
2	Account receivable	90,000
	Service revenue		90,000
	(To record service revenue on account.)
3	Cash	29,000
	Service revenue		29,000
	(To record service revenue on cash.)
4	Cash	61,000
	Account receivable		61,000
	(To record cash collected from account receivable.)
5	Salaries expense	18,000
	Cash		18,000
	(To record salaries expense paid.)
6	Bad debts expense (Also known as "Uncollectable expense")	1,450
	Allowance of doubtful account (Also known as "Allowance of Uncollectable account")		1,450
	(To record Bad debts expense.)

Beginning balance of Account receivable (If Any)			-
Add: Credit sales			90,000
Less: Cash Collected			61,000
Less: Account write off (If any)			-
Ending balance of Account receivable			29,000
Ending Allowance for Doubtful account balance After Adjustment (29000*5%)			1,450
Less: Ending Allowance for Doubtful account Credit balance before adjustment (If such balance is debit then added to above amount in order to calculate bad debts expense.) (No balance for first year, enter 0)			0
Adjustment for bad debt expense			1,450