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PA8-4 Accounting for Accounts and Notes Receivable Transactions [LO 8-2, LO 8-3] [The following information applies to the questions displayed below.] 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 partial list of transactions during the first quarter. a. During January, the company provided services for $30,000 on credit. b. On January 31, the company estimated bad debts using 1 percent of credit sales c. On February 4, the company collected $15,000 of accounts receivable d. On February 15, the company wrote off a $200 account receivable e. During February, the company provided services for $20,000 on credit. f On February 28, the company estimated bad debts using 1 percent of credit sales. g. On March 1, the company loaned $2,800 to an employee who signed a 6% note, due in 6 months. h. On March 15, the company collected $200 on the account written off one month earlier. i. On March 31, the company accrued interest earned on the note . On March 31, the company adjusted for uncollectible accounts, based on an aging analysis (below). Allowance for Doubtful Accounts has an unadjusted credit balance of $1,100 Number of Days Unpaid Total $ 200 $ 120$ 70 $ 10 Customer 0-30 31-60 61-90 Over 90 Alabama Tourism Bayside Bungalows Others (not shown to save space Xciting Xcursions $ 300 15,100 5,800 7,400 1,200 700 300 380 380 $15,980 $6,300 $7,470 $1,210 $1,000 Total Accounts Receivable Estimated uncollectible (%) 2% 10% 20% 35%

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