Wheelys, Inc., designs and sells footwear with a wheel in the heel, worn by sometimes-annoying kids at shopping malls. Assume it recently disclosed the following information concerning the Allowance for Doubtful Accounts in its annual report. Required: 1-a. Complete the T-account for the Allowance for Doubtful Accounts by entering into it the 2020 amounts from the above schedule. (Enter your answers in thousands.) 1-b. Complete the T-account in equation format given below to prove that the above items account for the changes in the account. (Enter your answers in thousands.) 2. This part of the question is not part of your Connect assignment. 3. Record summary journal entries for 2019 related to (a) estimating Bad Debt Expense and (b) writing off specific balances. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in thousands.) 4. Supply the missing dollar amount for 2018. (Enter your answer in thousands.) 5-a. If Wheelys had written off an additional $20 of Accounts Receivable during 2020 and the ending allowance balance was estimated to be $120 (dollars in thousands), will net receivables be affected? Yes No 5-b. If Wheelys had written off an additional $20 of Accounts Receivable during 2020 and the ending allowance balance was estimated to be $120 (dollars in thousands), will the net income be affected? Yes No 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. c. 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. f. On February 28 , the company estimated bad debts using 1 percent of credit sales. g. 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. i. 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 $1,200. j. On March 31, the company accrued interest earned on the note. Required: 1-a. For items (a) through (j), 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.) 1-b. Prepare the journal entries for the above items. (If no entry is required for a transaction/event, select "No journal entry required" n the first account field.) Journal entry worksheet Note: Enter debits before credits. 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.) 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
