apters 8,9,10 6 Saved PA8-4 Accounting for Accounts and Notes Receivable Transactions [LO 8-2, LO 8-3) The following information applies to the questions displayed below) Web Wizard, Inc., has provided information technology services for several years. For the first two months of the current year, the company has used the percentage of credit sales method to estimate bad debts. At the end of the first quarter, the company switched to the aging of accounts receivable method. The company entered into the following partial list of transactions during the first quarter. a. During January, the company provided services for $48,000 on credit. b. On January 31, the company estimated bad debts using 1 percent of credit sales, c On February 4, the company collected $24,000 of accounts receivable. d. On February 15, the company wrote off a $200 account receivable. e. During February, the company provided services for $38,000 on credit On February 28, the company estimated bad debts using 1 percent of credit sales. 9. On March 1, the company loaned $2,800 to an employee who signed a 6% note, due in 6 months h. On March 15, the company collected $200 on the account written off one month earlier. 1. On March 31, the company accrued interest earned on the note. Jon March 31, the company adjusted for uncollectible accounts, based on an aging analysis (below). Allowance for Doubtful Accounts has an unadjusted credit balance of $1.280 OOK Print eferences Customer Maboma Tour Bayside Bungalows Others (not shown to save space Xeiting Reersions Total Necounts Receivable Estimated Uncollectible Total 200 480 18,700 360 319,760 Nuwo Daye tid 31-60 61.90 Over 90 $ 120 3 10 10 480 7.600 3.200 1.200 760 98,100 29 09. 270 ION $1.210 200 351 PA8.4 Part 1 Required: 1. For items to analyze the transaction to determine effects on specific financial statement accounts and the overall accounting equation (Enter any decreases to Assets, Liabilities, or Stockholders Equity with a minus sign. Do not found intermediate PA8-4 Part 1 Required: 1. For Items (a0), analyze the transaction to determine effects on specific financial statement accounts and the overall accounting equation (Enter any decreases to Assets, Liabilities, or Stockholders Equity with a minus sign. Do not round intermediate calculations.) Liabletes Stockholders' Equity a Accounts Receivable d 1 equired information 48,000 1 a Accounts Receivable Service Revenue 48,000 480 2 b. Bad Debt Expense Allowance for Doubtful Accounts 480 24,000 c. Cash Accounts Receivable 24,000 200 4 d. Allowance for Doubtful Accounts Accounts Receivable 200 38,000 5 Accounts Receivable Service Revenue 38.000 5 No Transaction Recorded 2,800 7 9 Notes Receivable (short-term) Cash 2,800 200 B (1) Accounts Receivable Allowance for Doubtful Accounts 200 200 9 Cash Accounts Receivable 200 14 10 Interest Receivable interest Revenue 14 PA8-4 Part 3 3. Show how Accounts Receivable, Notes Receivable, and their related accounts would be reported in the current assets section of a classified balance sheet at the end of the quarter on March 31. (Do not round intermediate calculations.) WEB WIZARD, INC Partial Balance Sheet At March 31 Assets aces Current Assets Accounts Receivable, Net of Allowance