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 $45,000 on credit. b. On January 31, the company estimated bad debts using 2 percent of credit sales c. On February 4, the company collected $22,500 of accounts receivable d. On February 15, the company wrote off a $200 account receivable e. During February, the company provided services for $35,000 on credit. f On February 28, the company estimated bad debts using 2 percent of credit sales. g. On March 1, the company loaned $2,000 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 . 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 $1,250 Number of Days Unpaid Customer Over Total 200 $ 120 $ 70 $ 10 0-30 31-60 61-90 90 Alabama Tourism Bayside Bungalows Others (not shown to save space8,100 7,300 8,900 ,200 700 Xciting Xcursions 450 $ 450 380 380 $19,130 $7,800 $8,970 $1,210 $1,150 Total Accounts Receivable Estimated uncollectible (%) 3% 10% 20% 40% Required: 1. For items (a)-0, analyze the amount and direction or-of effects on specific financial statement accounts and the overall accounting equation. (Enter any decreases to account balances with a minus sign.) Assets Liabilities Stockholders' Equity 2. Prepare the journal entries for items (a)-0). (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 2 4 6 7 8 Record service revenue of $45,000 sold on account during January. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journal 2. Prepare the journal entries for items (a)-0). (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 2 4 Record the adjusting entry for bad debts as of January 31 using 2 percent of credit sales. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journal 2. Prepare the journal entries for items (a)-). (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 2 3 4 6 7 8 Record the collection of $22,500 of outstanding accounts receivables on February 4 Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journal 2. Prepare the journal entries for items (a-). (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 4 6 7 Record the write-off of a $200 account receivable on February 15. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journal 2. Prepare the journal entries for items (a)Hi). (f no entry is required for a transaction/event, select No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet 2 4 6 8 Record service revenue of $35,000 provided on account during February. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journal 2. Prepare the journal entries for items (aH). (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 2 3 4 6 8 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 2. Prepare the journal entries for items (a)-(). (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 Record the receipt of a note on March 1 for a $2,000 loan to an employee. Note: Enter debits before credits. Transaction General Journal Debit Credit 9 Record entry Clear entry View general journal 2. Prepare the journal entries for items (a-). (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 4 ecor the reversal ofactrecv pri e month earlier. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journal 2. Prepare the jourmal entries for items (a)-0). (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 4 6 7 Record the receipt of cash of $200 from the customer. Note: Enter debits before credits. Transaction General Journal Debit Credit h(2) Record entry Clear entry View general journal 2. Prepare the journal entries for items (a)-0). (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 K.... 4 5 67 8 910 11 Record the interest accrued on the note as of March 31. Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journal 2. Prepare the journal entries for items (a-0. (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 4 567 890 11 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 Record entry Clear entry View general journal 3. Show how Accounts Receivable, Notes Receivable, and their related accounts would be reported in the current assets section of a classified balance sheet. WEB WIZARD, INC Partial Balance Sheet At March 31 Assets Current Assets: 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