Question

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

2019:
Wrote off an uncollectible account for $700.
Provided $110,000 of services on account.
Provided $25,000 of services and collected cash.
Collected $92,000 cash from accounts receivable.
Paid $30,000 of salaries expense for the year.
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.

Prepare the statement of changes in stockholders' equity for 2019.

Answer 1

To prepare the statement of changes in stockholders' equity for 2019, we need to analyze the events provided. Each event's impact on stockholders' equity should be considered.

Step-by-step explanation:

The given question is about preparing the statement of changes in stockholders' equity for 2019 for Leach Inc., based on the provided events. To prepare the statement of changes in stockholders' equity, we need to consider the account transactions that affect the equity of the company. In this case, we have the following events:

1. An uncollectible account was written off for $700.
2. $110,000 of services were provided on account.
3. $25,000 of services were provided and cash was collected.
4. $92,000 cash was collected from accounts receivable.
5. $30,000 of salaries expense was paid for the year.
6. Accounts were adjusted to reflect uncollectible accounts expense for the year.
7. Leach estimates that 5 percent of the ending accounts receivable balance will be uncollectible.

By analyzing each event and its impact on stockholders' equity, we can prepare the statement of changes in stockholders' equity for 2019.