60.1K

Verified Solution

Link Copied!

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.

During January, the company provided services for $$40,000$ on credit.

On January $31,$ the company estimated bad debts using $1$ percent of credit sales.

On February $4,$ the company collected $$20,000$ of accounts receivable.

On February $15,$ the company wrote off $$100$ account receivable.

During February, the company provided services for $$30,000$ on credit.

On February $28,$ the company estimated bad debts using $1$ percent of credit sales.

On March $1,$ the company loaned $$2,400$ to an employee, who signed a $6\%$ note, due in $6$ months.

On March $15,$ the company collected $$100$ on the account written off one month earlier.

On March $31,$ the company accrued interest earned on the note.

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 $$1,200.$

Customer Total Number of Days Unpaid

$0$ to $3031$ to $6061$ to $90$ Over $90$

Alabama Tourism $ $200$ $ $100$ $ $80$ $ $20$

Bayside Bungalows $400$ $ $400$

Others $($not shown to save space$)17,0006,8008,4001,000800$

Xciting Xcursions $400400$

Total Accounts Receivable $ $18,000$ $ $7,300$ $ $8,480$ $ $1,020$ $ $1,200$

Estimated Uncollectible $(\%)2\%10\%20\%40\%$

Show how Accounts Receivable, Notes Receivable, and their related accounts would be reported in the current assets section of a classified balance sheet at the end of the quarter on March $31.($Do not round intermediate calculations.$)$

Answer & Explanation Solved by verified expert

See Answer