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 $46,000 on credit. b. On January 31, the company estimated bad debts using 1 percent of credit sales. c. On February 4, the company collected $23,000 of accounts receivable. d. On February 15, the company wrote off a $100 account receivable. e. During February, the company provided services for $36,000 on credit. f. On February 28, the company estimated bad debts using 1 percent of credit sales. 9. On March 1, the company loaned $2,400 to an employee, who signed a 6% note, due in 6 months. h. On March 15, the company collected $100 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 $1,260. 100 Customer Alabama Tourism Bayside Bungalows Others (not shown to save space) Xciting Xeursions Total Accounts Receivable Estimated Uncollectible (8) Total $ 200 460 18,200 400 $19,260 Number of Days Unpaid 0-30 31-60 61.90 Over 90 $ $ 80 $20 $ 460 7,400 9,000 1,000 800 400 $7,900 $9,080 $1,020 $1,260 20 158 200 400 Record service revenue of $46,000 sold on account during January. Note: Enter debits before credits. Transaction General Journal Debit Credit a. Record the adjusting entry for bad debts as of January 31 using 1 percent of credit sales. Note: Enter debits before credits. Transaction General Journal Debit Credit b. Record the collection of $23,000 of outstanding accounts receivables on February 4. Note: Enter debits before credits. Transaction General Journal Debit Credit C. Record the write-off of a $100 account receivable on February 15. Note: Enter debits before credits. Transaction General Journal Debit Credit d. Record service revenue of $36,000 provided on account during February. Note: Enter debits before credits. Transaction General Journal Debit Credit e. Record the adjusting entry for bad debts as of February 28 using 1 percent of credit sales. Note: Enter debits before credits. Transaction f. General Journal Debit Credit Record the receipt of a note on March 1 for a $2,400 loan to an employee. Note: Enter debits before credits. Transaction General Journal Debit Credit g. Record the reversal of a $100 account receivable previously written off one month earlier. Vote: Enter debits before credits. Transaction General Journal Debit Credit h(1) Record the receipt of cash of $100 from the customer. Note: Enter debits before credits. General Journal Transaction h(2). Debit Credit Record the interest accrued on the note as of March 31. Note: Enter debits before credits. Transaction General Journal Debit Credit i. Record the adjusting entry for bad debts as of March 31 using the aging of accounts receivable method. Note: Enter debits before credits. Transaction General Journal Debit Credit 1
