Required information [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 $46,000 on credit. b. On January 31, the company estimated bad debts using 1 percent of credit sales. c. On February 4, the company collected $23,000 of accounts receivable. d. On February 15, the company wrote off $100 account receivable. e. During February, the company provided services for $36,000 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% 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 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 $1,260. Number of Days Unpaid Customer Total 0 to 30 31 to 60 61 to 90 Over 90 Alabama Tourism $ 200 $ 100 $ 80 $ 20 $ 460 Bayside Bungalows Others (not shown to save space) 460 18,200 7,400 9,000 1,000 800 Xciting Xcursions 400 400 Total Accounts Receivable $ 19,260 $ 7,900 $ 9,080 $ 1,020 $ 1,260 Estimated Uncollectible (%) 2% 15% 20% 40%
Required information [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 $46,000 on credit. b. On January 31, the company estimated bad debts using 1 percent of credit sales. c. On February 4, the company collected $23,000 of accounts receivable. d. On February 15, the company wrote off $100 account receivable. e. During February, the company provided services for $36,000 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% 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 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 $1,260. Number of Days Unpaid Customer Total 0 to 30 31 to 60 61 to 90 Over 90 Alabama Tourism $ 200 $ 100 $ 80 $ 20 $ 460 Bayside Bungalows Others (not shown to save space) 460 18,200 7,400 9,000 1,000 800 Xciting Xcursions 400 400 Total Accounts Receivable $ 19,260 $ 7,900 $ 9,080 $ 1,020 $ 1,260 Estimated Uncollectible (%) 2% 15% 20% 40%
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Question
Transcribed Image Text:**Educational Content: Reporting Accounts Receivable on a Balance Sheet**
---
**Instruction:**
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.)
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**Format for Reporting:**
**WEB WIZARD, INCORPORATED**
*Partial Balance Sheet
At March 31*
**Assets**
- **Current Assets:**
- *(Space for listing various current assets; specific accounts not shown here)*
- Accounts Receivable, Net of Allowance
- *(Additional spaces for listing other current assets)*
---
**Explanation:**
This format provides a structure for how to properly display and organize financial data related to receivables in a balance sheet. Notably, "Accounts Receivable, Net of Allowance" is a specific line item, indicating that it should reflect the actual expected collectible amount, after deducting any allowance for doubtful accounts. The layout includes placeholders for other potential current assets that may be part of a complete financial statement, highlighting the importance of a comprehensive view of current assets.
![**Required Information**
*[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 $46,000 on credit.
b. On January 31, the company estimated bad debts using 1 percent of credit sales.
c. On February 4, the company collected $23,000 of accounts receivable.
d. On February 15, the company wrote off $100 account receivable.
e. During February, the company provided services for $36,000 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% 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 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 $1,260.
**Aging Analysis Chart**
This chart organizes customers and their outstanding balances by the number of days unpaid and an estimated percentage of uncollectibility.
- **Customers**:
- Alabama Tourism: Total $200, Breakdown - $200 (0 to 30 days)
- Bayside Bungalows: Total $460, Breakdown - $100 (31 to 60 days), $80 (61 to 90 days), $20 (Over 90 days)
- Others (not shown to save space): Total $18,200, Breakdown - $18,200 (0 to 30 days), $7,400 (31 to 60 days), $9,000 (61 to 90 days), $1,000 (Over 90 days)
- Xciting Xcursions: Total $400](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3c350e68-d2b3-4d63-ba1b-ba8ac4bc119d%2F64481bea-9cca-479e-b650-83046be79c00%2F4i7do06_processed.png&w=3840&q=75)
Transcribed Image Text:**Required Information**
*[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 $46,000 on credit.
b. On January 31, the company estimated bad debts using 1 percent of credit sales.
c. On February 4, the company collected $23,000 of accounts receivable.
d. On February 15, the company wrote off $100 account receivable.
e. During February, the company provided services for $36,000 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% 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 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 $1,260.
**Aging Analysis Chart**
This chart organizes customers and their outstanding balances by the number of days unpaid and an estimated percentage of uncollectibility.
- **Customers**:
- Alabama Tourism: Total $200, Breakdown - $200 (0 to 30 days)
- Bayside Bungalows: Total $460, Breakdown - $100 (31 to 60 days), $80 (61 to 90 days), $20 (Over 90 days)
- Others (not shown to save space): Total $18,200, Breakdown - $18,200 (0 to 30 days), $7,400 (31 to 60 days), $9,000 (61 to 90 days), $1,000 (Over 90 days)
- Xciting Xcursions: Total $400
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