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.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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[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
0 to 30
$ 100
Customer
Total
31 to 60
61 to 90
Over 90
Alabama Tourism
$ 200
$ 80
$ 20
$ 460
Bayside Bungalows
Others (not shown to save space)
Xciting Xcursions
460
18,200
7,400
9,000
1,000
800
400
400
Total Accounts Receivable
$ 19,260
$ 7,900
$ 9,080
$ 1,020
$ 1,260
Estimated Uncollectible (%)
2%
15%
20%
40%
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. Number of Days Unpaid 0 to 30 $ 100 Customer Total 31 to 60 61 to 90 Over 90 Alabama Tourism $ 200 $ 80 $ 20 $ 460 Bayside Bungalows Others (not shown to save space) Xciting Xcursions 460 18,200 7,400 9,000 1,000 800 400 400 Total Accounts Receivable $ 19,260 $ 7,900 $ 9,080 $ 1,020 $ 1,260 Estimated Uncollectible (%) 2% 15% 20% 40%
2. Prepare the journal entries for items (a) to (j). (If no entry is required for a transaction/event, select "No Journal Entry Required" in
the first account field. Do not round intermediate calculations.)
View transaction list
Journal entry worksheet
1
4
5
6
7
8 9
10
11
>
Record the adjusting entry for bad debts as of March 31 using the aging of
accounts receivable method.
Note: Enter debits before credits.
Transaction
General Journal
Debit
Credit
j.
Record entry
Clear entry
View general journal
Transcribed Image Text:2. Prepare the journal entries for items (a) to (j). (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Do not round intermediate calculations.) View transaction list Journal entry worksheet 1 4 5 6 7 8 9 10 11 > Record the adjusting entry for bad debts as of March 31 using the aging of accounts receivable method. Note: Enter debits before credits. Transaction General Journal Debit Credit j. Record entry Clear entry View general journal
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