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.

PA8-4 Accounting for Accounts and Notes Recevable Transactons [co 8-2, Co8-3] The following information applies to the questions displayed below.] e following information applies to the questions displaved below. Web Wizard, Inc. has provided information technology services for several years. The company uses the percentage of credit sales method to estmate bad deb company adjusts its records using the aging of ccounts recevable method. The company entered into the following partial list of transactions during the first quarter ts for internal monthly reporting purposes. At the end of each quarter, the a. During January, the company provded services for $30,000 on credit. 6. On January 31, the company estmated bad debts using 1 percent of credit sales. c. On February 4, the company collected $5,0oo of accounts recevable. c. On February 4, the company collected s5,o0o of accounts recevable. d. On February 15, the company wrote off a $200 account receivable. e. During February, the company provded services for $20,000 on credit. f On February 28, the company estmated bad debts usn 1 percent of credit sales g. 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 wrtten off one month earlier. h. On March 15, the company collectrd s20o 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 agng analysis (below). Allowance for Doubtful Accounts has an unadjusted credit balance of $1,100. Number of Days Unpaid Customer Total o-30 31-60 61-90 Over go Alabama Tourism Bauside Bunaalows $200 120 $ 70 $ 10 ayside Bungalows 300 300 Others (not shown to save space) Xciting Xcursons 15,100 5,8 7,400 1,200700 Total Accounts Receivable Estimated uncollectible (%) $15,980 $6,300 $7470 $1,210 $1,oo0 2% 10% 20% 35%