Web Wizard, Inc. has provided information technology services for several years. The company uses the percentage of credit saleS method to estimate bad debts for internal monthly reporting purposes, At the end of each quarter. the company adjusts its records using the aging of accounts receivable method. The company entered into the following selected transactions during the first quarter of 2020: a. During January, the company provided services for $40,000 on credit. b. On January 31. the company estimated bad debts using 1 percent of credit sales. C. On February 4. the company collected $20,000 of accounts receivable. d. On February 15, the company wrote off a $100 account receivable. e. During February, the company provided services for $30.000 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 percent note, due in six months. h. On March 15, the company collected $100 on the account written off one month earlier i. 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 had an unadjusted credit balance of S1,200. j. On March 31, the company accrued interest earned on the note. Number of Days Unpaid Customer Total 31-60 61-90 Over 90 Altavista 1 ourism Bayling Bungalows Others (not shown tO save Xciting Xcursions 200 400 17,000 400 100 20 400 space) 6,800 400 8,400 1,000 800 Total Accounts Receivable, $18,000 $ 7,300 $8,480 $1,020 51,280 Estimated uncollectible (X) 2% 10% 20% 40% Requlred: 1-a. For items (a) through (). analyze the amount and effects on specific financial statement accounts and the overall accounting equation. (Enter any decreeses to the account with a minus sign.) Transaction Assets Liabilities Shareholders' Equity a. b. d. h1.reversal of write-off h2. collection 1b. Prepare the Journal entries for the above items. (If no entry is required fora transaction/event. select "Nlo journal entry requtred". In the first account field.) Vlow traneaction lat Journal entry worksheet 2, 4 5 a Record the services provided on credit. Nate Enter debits befDre crecits. Transaction General Journal Debit Credit a. Record entry Clear entry Vlew general Jourmal 2 Show how the recelvables related to these transactions would be reported In the current assets section of a classified balance sheet. (Amounts to be deducted should be Indicated by a minus slgn.) WEB WIZARD, INC. Partial Balance Sheet At March 31, 2020 Assets Current assets. 3. Name the accounts related to Accounts Recelvable and Note Recelvable that would be reported on the Income statement and Indicate whether they would appear before or after Income from Operatlons. Accounts Reported on the Income Statement Before/After Income from Operations
Web Wizard, Inc. has provided information technology services for several years. The company uses the percentage of credit saleS method to estimate bad debts for internal monthly reporting purposes, At the end of each quarter. the company adjusts its records using the aging of accounts receivable method. The company entered into the following selected transactions during the first quarter of 2020: a. During January, the company provided services for $40,000 on credit. b. On January 31. the company estimated bad debts using 1 percent of credit sales. C. On February 4. the company collected $20,000 of accounts receivable. d. On February 15, the company wrote off a $100 account receivable. e. During February, the company provided services for $30.000 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 percent note, due in six months. h. On March 15, the company collected $100 on the account written off one month earlier i. 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 had an unadjusted credit balance of S1,200. j. On March 31, the company accrued interest earned on the note. Number of Days Unpaid Customer Total 31-60 61-90 Over 90 Altavista 1 ourism Bayling Bungalows Others (not shown tO save Xciting Xcursions 200 400 17,000 400 100 20 400 space) 6,800 400 8,400 1,000 800 Total Accounts Receivable, $18,000 $ 7,300 $8,480 $1,020 51,280 Estimated uncollectible (X) 2% 10% 20% 40% Requlred: 1-a. For items (a) through (). analyze the amount and effects on specific financial statement accounts and the overall accounting equation. (Enter any decreeses to the account with a minus sign.) Transaction Assets Liabilities Shareholders' Equity a. b. d. h1.reversal of write-off h2. collection 1b. Prepare the Journal entries for the above items. (If no entry is required fora transaction/event. select "Nlo journal entry requtred". In the first account field.) Vlow traneaction lat Journal entry worksheet 2, 4 5 a Record the services provided on credit. Nate Enter debits befDre crecits. Transaction General Journal Debit Credit a. Record entry Clear entry Vlew general Jourmal 2 Show how the recelvables related to these transactions would be reported In the current assets section of a classified balance sheet. (Amounts to be deducted should be Indicated by a minus slgn.) WEB WIZARD, INC. Partial Balance Sheet At March 31, 2020 Assets Current assets. 3. Name the accounts related to Accounts Recelvable and Note Recelvable that would be reported on the Income statement and Indicate whether they would appear before or after Income from Operatlons. Accounts Reported on the Income Statement Before/After Income from Operations
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter5: Sales And Receivables
Section: Chapter Questions
Problem 94.1C
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