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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

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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
Transcribed Image Text: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
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