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 selected transactions during the first quarter of 2020 a During January, the company provided services for $40,000 on credit b. On January 31, the company estimated bad debts using 1 percent of credit sales On February 4, the company collected $20,000 of accounts receivable d On February 15, the company wrote off a $100 account receivable e During February, the company provided services for $30,000 on credit. 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 percent note, due in six months. h On March 15, the company collected $100 on the account written off one month earlier On March 31, the company adjusted for uncollectible accounts, based on the following aging analysis, which includes the preceding transactions (as well as others not listed). Prior to the adjustment, Allowance for Doubtful Accounts had an unadjusted credit balance of $1200 On March 31, the company accrued interest earned on the note Number of Days tinpald 0-30 Total 31-60 61-10 Over 90 customer 5 100 $ BO 5 20 $ 200 400 17,000 400 800 8.400 1.000 Altavista Touris Bayling Bungalows others (not shown to save space) Xciting Xcursions Total Accounts Receivable 400 5,800 400 $18,000 $7,300 53,480 $1,020 $1.200 2% 30% 205 40 Estimated uncollectible () Required: T-a. For items (a) through analyze the amount and effects on specific financial statement accounts and the overall accounting equation (Enter any decreases to the account with a minus sign.) Transaction Liabilities Shareholders' Equity a d hreven of wolf 12. collection 1.b. Prepare the journal entries for the above items of no entro i rantir 1. Prepare the journal entries for the above items. (If no entry is required for a transaction/event, select "No journal entry required" In the first account field.) View transaction list Journal entry worksheet 1 5 6 7 8 11 > Record the services provided on credit Note the store tests Transaction General Journal Deb Cred Record entry Clearby View general Jurnal 2. Show how the receivables related to these transactions would be reported in the current assets section of a classified balance sheet. (Amounts to be deducted should be indicated by a minus sign.) WEB WIZARD, INC. Partial Balance Sheet At March 31, 2020 Assets Current assets 3. Name the accounts related to Accounts Receivable and Note Receivable that would be reported on the income statement and indicate whether they would appear before or after Income from Operations Accounts Reported on the income Statement Before After Income from Operations
