Exercise 7-7A Effect of recognizing uncollectible accounts on the financial statements: percent of receivables allowance method LO 7-2 Skip to question [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: Issued $22,000 of common stock for cash. Provided $91,200 of services on account. Provided $48,000 of services and received cash. Collected $81,000 cash from accounts receivable. Paid $50,000 of salaries expense for the year. Adjusted the accounting records to reflect uncollectible accounts expense for the year. Leach estimates that 4 percent of the ending accounts receivable balance will be uncollectible. Closed the revenue account. Closed the expense account. Year 2: Wrote off an uncollectible account for $800. Provided $100,000 of services on account. Provided $44,000 of services and collected cash. Collected $93,000 cash from accounts receivable. Paid $77,000 of salaries expense for the year. Adjusted the accounts to reflect uncollectible accounts expense for the year. Leach estimates that 4 percent of the ending accounts receivable balance will be uncollectible