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 $47,000 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 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 earned on the note, 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. 110 Customer Alabama Tourism Bayside Bungalows Others (not shown to save space) xciting Xcursions Total Accounts Receivable Estimated Uncollectible (X) Total $ 230 420 18,600 390 $19,690 Number of Days Unpaid 31-60 Over 50 $ 90 30 $ 470 9.100 1,100 900 7,500 390 $3,000 3 $ 9,190 10% $1,130 20% $1,370 PA8-4 Part 1 Required: 1. For items (0-0). 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.) PA8-4 Part 2 2. Prepare the journal entries for items (a0). (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations.) View transaction list Journal entry worksheet search o i Required information Journal entry worksheet 1 2 3 4 5 6 7 8 11 Record the collection of $23,500 of outstanding accounts receivables on February 4. Note: Enter debits before credits Transaction General Journal Debit Credit c. Record entry Clear entry View general journal Required information of 4 Journal entry worksheet Seved 8 Homework Required information Journal entry worksheet 1 2 3 4 6 7 8 11 Record service revenue of $37,000 provided on account during February Note: Enter debits before credits es Transaction General Journal Debit Credit Record entry Clear entry View general journal search SI Required information Journal entry worksheet 1 2 3 4 5 6 7 8 ... 11 Record the adjusting entry for bad debts as of February 28 using 2 percent of credit sales. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journal search Required information Journal entry worksheet Required information Journal entry worksheet 4 Record the reversal of a $150 account receivable previously written off one month earlier. Note: Enter debits before credits. General Journal Debit Credit Transaction h(1) Record entry Clear entry View general journal search OBI Thp Homework Required information Journal entry worksheet arch hp Required information Journal entry worksheet arch PA8-4 Part 3 14 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.) ok WEB WWARD, INC Partial Balance Sheet At March 31 Assets + ces Current Assets Accounts Receivable. Net of Allowance PAS-4 Part 4 4. Sales Revenue and Service Revenue are two income statement accounts that relate to Accounts Receivable Name two other accounts related to Accounts Receivable and Notes Receivable that would be reported on the income statement and indicate whether each would appear before or after locome from Operations Web Wizard would report Income from Operations Income from Operations