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: Year 1: 1. Issued $10,000 of common stock for cash. 2. Provided $70,000 of services on account. 3. Provided $27.000 of services and received cash. 4. Collected $43,000 cash from accounts receivable, 5. Paid $20,000 of salaries expense for the year. 6. Adjusted the accounting records to reflect uncollectible accounts expense for the year. Leach estimates that 5 percent of the ending accounts receivable balance will be uncollectible. Year 2: 1. Wrote off an uncollectible account for $670 2. Provided $90,000 of services on account 3. Provided $20.000 of services and collected cash 4. Collected $72,000 cash from accounts receivable. 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 will be uncollectible. Required a. Organize the transaction data in accounts under an accounting equation. (Enter any decreases to account balances with a minus sign. Not all cells in the "Accounts Titles for Retained Earnings" column may require an input - leave cells blank if there is no - < Prev 3 4 of 4 !!! Next >

Answer 1

a. accounting equation

YEAR 1

event	cash	accounts receivable	allowance	liabilities	common stock	retained earnings	accounting titles for retained earnings
1	$10000				$10000
2		$70000				$70000	service revenue
3	$27000					$27000	SERVICE REVENUE
4	$43000	-$43000
5	-$20000					-$20000	SALARY EXPENSE
6			1350[27000*5%]			-1350	bad debts expense
Bal.	60000	27000	1350		10000	75650