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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.

2. Prepare an income statement, statement of changes in stockholders’ equity, balance sheet, and statement of cash flows for 2018.

b. Prepare an income statement, statement of changes in stockholders' equity, balance sheet, and statement of cash flows for Complete this question by entering your answers in the tabs below. Req B Inc Stmt Req B Stmt SE Req B Bal Sheet Req B Stmt Cash Flows Prepare the balance sheet for 2018. LEACH INC. Balance Sheet As of December 31, 2018 Assets Total assets Liabilities Stockholders' equity Total stockholders' equity Total liabilities and stockholders' equity < ReqB Stmt SE Req B Stmt Cash Flows >

Answer 1

Balance sheet- 2018

Assets
Cash		$92000
Accounts receivable		$27000
Total assets		$119000
Liabilities		$2430
Stockholder's equity
Common stock	$10000
Retained earnings	$106570
Total stockholder's equity		$116570
Total liabilities		$119000

Cash flow statement-2018

Cash flow from operating activities
Net profit	$106570
+ Non cash expense	$2430
- Change in accounts receivable	(27000)
Net Cash flow from operating activities		$82000
Cash flow from investing activities		$0
Cash flow from financing activities
Issue of common shares		$10000
Net change in cash		$92000
Beginning cash		$0
End cash		$92000

Statement of changes in equity-2018

Beginning common stock	$0
Issue of common stock	$10000
Ending common stock		$10000
Beginning retained earnings	$0
Net profit during the year	106570
Ending retained earnings		$106570
Total stockholder's equity		$116570

Income statement-2018

Service revenue		$127000
Operating expenses
Salaries	$18000
Bad debt	$2430
Total operating expenses		$20430
Net income		$106570