required information {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 $36,000 on credit. b. On January 31, the company estimated bad debts using 1 percent of credit sales. c. On February 4, the company collected $18,000 of accounts receivable d. On February 15, the company wrote off a $200 account receivable. e. During February, the company provided services for $26,000 on credit f 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 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 $1,160. 120 Customer Alabama Tourism Bayside Bungalows others (not shown to save space) Xciting Xcursions Total Accounts Receivable Estimated Uncollectible (X) Total $ 200 36e 16,3ee 380 $17,24e Number of Days Unpaid 8-30 31-60 61-90 Over 90 $ 78 5 18 $ 360 6,480 8,eee 1,200 7ee 388 $6,900 $8.07e $1,210 $1,068 2x 10% 20 35% Assets Liabilities Stockholders Equity d. E. g a. During January, the company provided services for $36,000 on credit. b. On January 31, the company estimated bad debts using 1 percent of credit sales. c. On February 4, the company collected $18,000 of accounts receivable d. On February 15, the company wrote off a $200 account receivable. e. During February, the company provided services for $26,000 on credit. 1. On February 28, the company estimated bad debts using 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 written off one month earlier. 1. 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 $1,160. 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 Al March 31 Assets Current Assets: Accounts Receivable, Net of Allowance 0-30 $ 120 Customer Alabama Tourism Bayside Bungalows Others (not shown to save space) Xciting Xcursions Total Accounts Receivable Estimated Uncollectible (%) Total $ 200 360 16,300 380 $17,240 Number of Days Unpaid 31-60 61-90 Over 90 $ 70 $ 10 $ 360 8,000 1,200 700 6,480 380 $ 6,900 2% $ 8, eze 10% $1,210 20% $1,060 35% 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, Income from Operations, Web Wizard would report Income from Operations. Income from Operations
