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. The company uses the percentage of credit sales method to estimate bad debts for internal monthly reporting purposes. At the end of each quarter, the company adjusts its records using 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. b. 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. f 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. i. On March 31, the company accrued interest earned on the note j. 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 $1,270 Number of Days Unpaid Customer Total 0-30 31-60 61-90 Over 90 $ 230 $110 $ 90 $ 30 Alabama Tourism Bayside Bungalows Others (not shown to save space 18,600 7,500 9,100 0 900 Xciting Xcursions 470 $ 470 390 390 $19,690 $8,000 $9,190 $1,130 $1,370 Total Accounts Receivable Estimated uncollectible (%) 3% 10% 20% 30% 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. WEB WIZARD, INC Partial Balance Sheet At March 31 Assets Current Assets: Accounts Receivable Allowance for Doubtful Accounts Accounts Receivable, Net of Allowance Note Receivable Interest Receivable 19,690 13