Required information The following information applies to the questions displayed below.] 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 00:56:48 a. During January, the company provided services for $35,000 on credit. b. On January 31, the company estimated bad debts using 2 percent of credit sales. c On February 4, the company collected $17,500 of accounts receivable d. On February 15, the company wrote off a $100 account receivable e. During February, the company provided services for $25,000 on credit. f On February 28, the company estimated bad debts using 2 percent of credit sales. g. On March 1, the company loaned $3,000 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. 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) eBook Allowance for Doubtful Accounts has an unadjusted credit balance of $1,150 Number of Days Unpaid Total 0-30 31-60 61-90 Over 90 $ 200$100 Customer Alabama Tourism Bayside Bungalows Others (not shown to save space) Xciting Xcursions 80 $ 20 350 $ 350 16,000 6,300 7,900 1,000 800 400 400 Total Accounts Receivable Estimated Uncollectible ( % ) $16,950 $6,800 $7,980 $ 1,020 $1,150 3% 15% 20% 40% Required: 1. For items (a)-(), analyze the transaction to determine effects on specific financial statement accounts and the overall accounting equation. (Enter any decreases to Assets, Liabilities, or Stockholders Equity with a minus sign. Do not round intermediate calculations. Assets iabilities Stockholders' Equity 9
Required information The following information applies to the questions displayed below.] 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 00:56:48 a. During January, the company provided services for $35,000 on credit. b. On January 31, the company estimated bad debts using 2 percent of credit sales. c On February 4, the company collected $17,500 of accounts receivable d. On February 15, the company wrote off a $100 account receivable e. During February, the company provided services for $25,000 on credit. f On February 28, the company estimated bad debts using 2 percent of credit sales. g. On March 1, the company loaned $3,000 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. 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) eBook Allowance for Doubtful Accounts has an unadjusted credit balance of $1,150 Number of Days Unpaid Total 0-30 31-60 61-90 Over 90 $ 200$100 Customer Alabama Tourism Bayside Bungalows Others (not shown to save space) Xciting Xcursions 80 $ 20 350 $ 350 16,000 6,300 7,900 1,000 800 400 400 Total Accounts Receivable Estimated Uncollectible ( % ) $16,950 $6,800 $7,980 $ 1,020 $1,150 3% 15% 20% 40% Required: 1. For items (a)-(), analyze the transaction to determine effects on specific financial statement accounts and the overall accounting equation. (Enter any decreases to Assets, Liabilities, or Stockholders Equity with a minus sign. Do not round intermediate calculations. Assets iabilities Stockholders' Equity 9
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter5: Sales And Receivables
Section: Chapter Questions
Problem 85APSA: Determining Bad Debt Expense Using the Aging Method At the beginning of the year, Tennyson Auto...
Related questions
Question
Expert Solution
Trending now
This is a popular solution!
Step by step
Solved in 10 steps with 10 images
Recommended textbooks for you
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
College Accounting (Book Only): A Career Approach
Accounting
ISBN:
9781305084087
Author:
Cathy J. Scott
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
College Accounting (Book Only): A Career Approach
Accounting
ISBN:
9781305084087
Author:
Cathy J. Scott
Publisher:
Cengage Learning
College Accounting (Book Only): A Career Approach
Accounting
ISBN:
9781337280570
Author:
Scott, Cathy J.
Publisher:
South-Western College Pub
Financial Accounting
Accounting
ISBN:
9781337272124
Author:
Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:
Cengage Learning
College Accounting, Chapters 1-27
Accounting
ISBN:
9781337794756
Author:
HEINTZ, James A.
Publisher:
Cengage Learning,