Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed

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 $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 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. 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 $1,160 Number of Days Unpaid Customer Total 0-30 31-60 61-90 Over 90 $ 200 $ 120$ 70 $ 10 Alabama Tourism Bayside Bungalows Others (not shown to save space) Xciting Xcursions 360 16,300 380 $ 360 700 6,4008,000 1,200 380 17,240 $6,900 $8,070 $1,210 $1,060 Total Accounts Receivable Estimated uncollectible (%) 2% 10% 20% 35%

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

ISO 9000 Family Of Standards With Extracts From ISO 9001 Audit Trail

Authors: David John Seear

1st Edition

1477226400, 978-1477226407

More Books

Students also viewed these Accounting questions