O Required information 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 $47000 on credit. On January 31, the company estimated bad debts using 2 percent of credit sales c On February 4, the company collected $23,500 of accounts receivable, d On February 15, the company wrote off a $150 account receivable e During February, the company provided services for $37,000 on credit On February 28, the company estimated bad debts using 2 percent of credit sales, g. On March 1, the company loaned $2,600 to an employee who signed a 6% note, due in 6 months h On March 15, the company collected $150 on the account written off one month earlier. On March 31, the company accrued interest eamed on the note g. On March 31, the company adjusted for uncollectible accounts, based on an aging analysis (below). Allowance for Doubtful Accounts has an unadjusted credit balance of $1270 $ 110 Customer Alabama Tourism Bayside Bungalows Others (not shown to save space) Xciting Xcursions Total Accounts Receivable Estimated Uncollectible (*) Total 5 230 470 18,600 Number of Days Unpaid 61-90 Over 90 $ 90 $ 30 $ 470 9,100 1,100 900 390 7,500 390 $ 8,000 3 $19,690 59,190 10 51,130 20% $1,370 3 PA8-4 Part 1 Required: 1. For items ()-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.) Required information Lab a Accounts Receivable b. Allowance for Doubtful Accounts Cash 47,000 940 Service Revenue Bad Debt Expense 47,000 940 Accounts Receivable 23,500 (23,500) d 9 P - Liabilities Stockholders Equity Service Revenue Bad Debt Expense 47 000 940 23.500 (23,500) 47.000 940 PA8-4 Part 2 2. Prepare the journal entries for items (-) (if no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations.) IN HER Required information Service Revenue 37,000 6 Allowance for Doubtful Accounts Accounts Receivable 740 740 7 9 Accounts Receivable Accounts Receivable 2,600 2.600 8 h() Accounts Receivable Allowance for Doubtful Accounts 150 O 150 9 hi2) Accounts Receivable Accounts Receivable 150 3 > 150 10 Interest Receivable Interest Revenue 3 13 13 11 Allowance for Doubtful Accounts Bad Debt Expense 1.154 3 1 154 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 Portal Balance Sheet At March 31 Assets Current Asset Accounts Recable Net of Alliance