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 $32,000 on credit. b. On January 31, the company estimated bad debts using 1 percent of credit sales. c. On February 4, the company collected $16,000 of accounts receivable. d. On February 15, the company wrote off $100 account receivable. e. During February, the company provided services for $22,000 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 $1,120 Customer Alabana Tourism Bayside Bungalows Others (not shown to save space) Xciting Xcursions Total Accounts Receivable Estimated Uncollectible (4) Total $ 200 320 15,400 400 $ 16,320 0 to 30 $ 100 6,000 400 $ 6,500 28 Number of Daya Unpaid 31 to 60 61 to 90 $80 $ 20 1,000 7,600 $7,680 $ 1,020 20% 15% Over 90 $ 320 800 $ 1,120. 40% 2. Prepare the journal entries for items (a) to (). (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations.)
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 $32,000 on credit. b. On January 31, the company estimated bad debts using 1 percent of credit sales. c. On February 4, the company collected $16,000 of accounts receivable. d. On February 15, the company wrote off $100 account receivable. e. During February, the company provided services for $22,000 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 $1,120 Customer Alabana Tourism Bayside Bungalows Others (not shown to save space) Xciting Xcursions Total Accounts Receivable Estimated Uncollectible (4) Total $ 200 320 15,400 400 $ 16,320 0 to 30 $ 100 6,000 400 $ 6,500 28 Number of Daya Unpaid 31 to 60 61 to 90 $80 $ 20 1,000 7,600 $7,680 $ 1,020 20% 15% Over 90 $ 320 800 $ 1,120. 40% 2. Prepare the journal entries for items (a) to (). (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations.)
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
Please Explain Proper Step by Step and Do Not Give Solution In Image Format And Fast Answering Please & Thank you In Advance
Transcribed Image Text: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 $32,000 on credit.
b. On January 31, the company estimated bad debts using 1 percent of credit sales.
c. On February 4, the company collected $16,000 of accounts receivable.
d. On February 15, the company wrote off $100 account receivable.
e. During February, the company provided services for $22,000 on credit.
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 $1,120.
Customer
Alabama Tourism
Bayside Bungalows
Others (not shown to save space)
Xciting Xcursions
Total Accounts Receivable
Estimated Uncollectible (8)
Total
$ 200
320
15,400
400
$ 16,320
0 to 30
$ 100
6,000
400
$ 6,500
Number of Days Unpaid
31 to 60
61 to 90
$ 20
$80.
7,600
$7,680
15%
1,000
$ 1,020
20%
Over 90
$ 320
800
$ 1,120
40%
2. Prepare the journal entries for items (a) to (). (If no entry is required for a transaction/event, select "No Journal Entry Required" in
the first account field. Do not round intermediate calculations.)
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