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.
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.
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
![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%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3c350e68-d2b3-4d63-ba1b-ba8ac4bc119d%2Ffe48e0af-3511-4acd-b076-10a90d593c2d%2Fh9kjft4_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.
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: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
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education