Leach Inc. experienced the following events for the first two years of its opera

Question

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 $80,000 of services on account. 3. Provided $33,000 of services and received cash. 4. Collected $47,000 cash from accounts receivable. 5. Paid $22,000 of salaries expense for the year. 6. Adjusted the accounting records to reflect uncollectible accounts expense for the year. Leach estimates that 8 percent of the ending accounts receivable balance will be uncollectible. 2019: . Wrote off an uncollectible account for $700. 2. Provided $100,000 of services on account. 3. Provided $25,000 of services and collected cash. 4. Collected $82,000 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 that8 percent of the ending accounts receivable balance will be uncollectible

Explanation / Answer

Net Realizable Value of account receivable at December 31, 2018

Deatils Amount ($) Amount ($) Beginning Balance - - Add :Provided service on Account 80,000 Less : Cash received from accounts receivable (47,000) Ending balance of account receivable at December 31, 2018 33,000 Less : Allowance for doubtful accounts : 8 % * Ending balance of account receivable = 8%* $33,000 (2,640) Net Realizable Value $30,360

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