Mr Required information PA8-4 (Algo) Accounting for Accounts and Notes Receivable Transactions [LO 8-2, LO 8-3] [The following information applies to the questions displayed below.] Web Wizard, Incorporated, 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. a. During January, the company provided services for $47,000 on credit. b. On January 31, the company estimated bad debts using 2 percent of credit sales. c. On February 4, the company collected $23,500 of accounts receivable. d. On February 15, the company wrote off $150 account receivable. e. During February, the company provided services for $37,000 on credit. f. On February 28, the company estimated bad debts using 2 percent of credit sales. g. On March 1, the company loaned $2,600 to an employee, who signed a 6% note, due in 6 months. h. On March 15, the company collected $150 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 the following aging analysis, which includes the preceding transactions (as well as others not listed). Prior to the adjustment, Allowance for Doubtful Accounts has an unadjusted credit balance of $1,270. Customer Alabama Tourism Bayside Bungalows Others (not shown to save space) Xciting Xcursions Total Accounts Receivable Estimated Uncollectible (%) Total $ 230 470 18,600 390 $ 19,690 0 to 30 $ 110 7,500 390 $ 8,000 3% Number of Days Unpaid 31 to 60 61 to 90 $90 $30 9,100 $9,190 10% 1,100 $ 1,130 20% over 90 $ 470 900 $ 1,370 30% PA8-4 (Algo) Part 3 3. Show how Accounts Receivable, Notes Receivable, and their related accounts would be reported in the current assets section of a classified balance sheet at the end of the quarter on March 31. (Do not round intermediate calculations.)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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### Required Information: 
### PA8-4 (Algo) Accounting for Accounts and Notes Receivable Transactions [LO 8-2, LO 8-3]

[The following information applies to the questions displayed below.]

Web Wizard, Incorporated, 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:

a. During January, the company provided services for $47,000 on credit.
b. On January 31, the company estimated bad debts using 2 percent of credit sales.
c. On February 4, the company collected $23,500 of accounts receivable.
d. On February 15, the company wrote off a $150 account receivable.
e. During February, the company provided $50,000 in services on credit.
f. On February 28, the company estimated bad debts using 2 percent of credit sales.
g. On March 1, the company loaned $2,600 to an employee and signed a 6% note, due in 6 months.
h. On March 15, the company collected the $150 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 the following aging analysis, which includes the preceding transactions (as well as others not listed). Prior to the adjustment, Allowance for Doubtful Accounts has an unadjusted credit balance of $1,270.

#### Aging Analysis Table:

| Customer           | Total ($) | 1 to 30 Days Unpaid ($) | 31 to 60 Days Unpaid ($) | 61 to 90 Days Unpaid ($) | Over 90 Days Unpaid ($) |
|--------------------|-----------|-------------------------|--------------------------|--------------------------|--------------------------|
| Alabama Tourism    | 6,820     | 5,320                   | 110                      | 90                       | 1,300                    |
| Bayside Bungalows  | 470       | 0                       | 0                        | 0                        | 470                      |
| Others (not shown) | 18
Transcribed Image Text:### Required Information: ### PA8-4 (Algo) Accounting for Accounts and Notes Receivable Transactions [LO 8-2, LO 8-3] [The following information applies to the questions displayed below.] Web Wizard, Incorporated, 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: a. During January, the company provided services for $47,000 on credit. b. On January 31, the company estimated bad debts using 2 percent of credit sales. c. On February 4, the company collected $23,500 of accounts receivable. d. On February 15, the company wrote off a $150 account receivable. e. During February, the company provided $50,000 in services on credit. f. On February 28, the company estimated bad debts using 2 percent of credit sales. g. On March 1, the company loaned $2,600 to an employee and signed a 6% note, due in 6 months. h. On March 15, the company collected the $150 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 the following aging analysis, which includes the preceding transactions (as well as others not listed). Prior to the adjustment, Allowance for Doubtful Accounts has an unadjusted credit balance of $1,270. #### Aging Analysis Table: | Customer | Total ($) | 1 to 30 Days Unpaid ($) | 31 to 60 Days Unpaid ($) | 61 to 90 Days Unpaid ($) | Over 90 Days Unpaid ($) | |--------------------|-----------|-------------------------|--------------------------|--------------------------|--------------------------| | Alabama Tourism | 6,820 | 5,320 | 110 | 90 | 1,300 | | Bayside Bungalows | 470 | 0 | 0 | 0 | 470 | | Others (not shown) | 18
### Accounts Receivable Analysis and Balance Sheet Presentation

#### Table: Accounts Receivable Aging Schedule

| Customer                     | Total  | 0 to 30 | 31 to 60 | 61 to 90  | Over 90 |
|------------------------------|--------|---------|----------|-----------|---------|
| Alabama Tourism              | $ 230  | $ 110   | $ 90     | $ 30      |         |
| Bayside Bungalows            | $ 470  | $       | $        | $         | $ 470   |
| Others (not shown to save space) | $ 18,600 | $ 7,500 | $ 9,100  | $ 1,100   | $ 900   |
| Xciting Xcursions            | $ 390  | $ 390   | $        | $         |         |
| **Total Accounts Receivable**| **$ 19,690** | **$ 8,000** | **$ 9,190** | **$ 1,130** | **$ 1,370** |
| **Estimated Uncollectible (%)** |        | 3%      | 10%       | 20%       | 30%     |

#### Partial Balance Sheet as of March 31

This section requires showing how Accounts Receivable, Notes Receivable, and their related accounts would be reported in the current assets section of a classified balance sheet.

#### WEB WIZARD, INCORPORATED
**Partial Balance Sheet**
**At March 31**

**Assets**

**Current Assets:**
- **Accounts Receivable:** $ 19,690
- **Allowance for Doubtful Accounts:**
- **Accounts Receivable, Net of Allowance:**
- **Notes Payable (short-term):**
- **Interest Receivable:**

Please ensure the given amounts are accurately calculated without rounding intermediate calculations to reflect the correct financial position at the end of the given period.

*(Note: The table provides a detailed breakdown of the aging of the accounts receivable, presenting a more comprehensive view of outstanding invoices based on the number of days they are unpaid. The balance sheet template illustrates where to record and include calculations such as the Allowance for Doubtful Accounts and Net Accounts Receivable within the current assets section.)*
Transcribed Image Text:### Accounts Receivable Analysis and Balance Sheet Presentation #### Table: Accounts Receivable Aging Schedule | Customer | Total | 0 to 30 | 31 to 60 | 61 to 90 | Over 90 | |------------------------------|--------|---------|----------|-----------|---------| | Alabama Tourism | $ 230 | $ 110 | $ 90 | $ 30 | | | Bayside Bungalows | $ 470 | $ | $ | $ | $ 470 | | Others (not shown to save space) | $ 18,600 | $ 7,500 | $ 9,100 | $ 1,100 | $ 900 | | Xciting Xcursions | $ 390 | $ 390 | $ | $ | | | **Total Accounts Receivable**| **$ 19,690** | **$ 8,000** | **$ 9,190** | **$ 1,130** | **$ 1,370** | | **Estimated Uncollectible (%)** | | 3% | 10% | 20% | 30% | #### Partial Balance Sheet as of March 31 This section requires showing how Accounts Receivable, Notes Receivable, and their related accounts would be reported in the current assets section of a classified balance sheet. #### WEB WIZARD, INCORPORATED **Partial Balance Sheet** **At March 31** **Assets** **Current Assets:** - **Accounts Receivable:** $ 19,690 - **Allowance for Doubtful Accounts:** - **Accounts Receivable, Net of Allowance:** - **Notes Payable (short-term):** - **Interest Receivable:** Please ensure the given amounts are accurately calculated without rounding intermediate calculations to reflect the correct financial position at the end of the given period. *(Note: The table provides a detailed breakdown of the aging of the accounts receivable, presenting a more comprehensive view of outstanding invoices based on the number of days they are unpaid. The balance sheet template illustrates where to record and include calculations such as the Allowance for Doubtful Accounts and Net Accounts Receivable within the current assets section.)*
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