1. For items (a)-0), analyze the transaction to determine effects on specific financial statement accounts and the overall accountingequation. (Enter any decreases to Assets, Liabilities, or Stockholders Equity with a minus sign. Do not round intermediatecalculations.)AssetsLiabilitiesStockholders' Equityа.b.C.d.e.f.g.h.i.j. Required information[The following information applies to the questions displayed below.]Web Wizard, Inc., has provided information technology services for several years. For the first two months of the currentyear, 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 oftransactions during the first quarter.a. During January, the company provided services for $44,000 on credit.b. On January 31, the company estimated bad debts using 1 percent of credit sales.c. On February 4, the company collected $22,000 of accounts receivable.d. On February 15, the company wrote off a $150 account receivable.e. During February, the company provided services for $34,000 on credit.f. On February 28, the company estimated bad debts using 1 percent of credit sales.g. On March 1, the company loaned $2,200 to an employee, who signed a 6% note, due in 6 months.h. On March 15, the company collected $150 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 an aging analysis (below). Allowance forDoubtful Accounts has an unadjusted credit balance of $1,240.Number of Days UnpaidCustomerTotal0-3031-6061-90Over 90Alabama TourismBayside BungalowsOthers (not shown to save space)Xciting Xcursions230110903044044018,0007,2003908,8001,100900390Total Accounts Receivable$19,060$7,700$8,890$1,130$1,340Estimated Uncollectible (8)2810%20%30%

Computation of allowance for estimated uncollectibles - Web Wizard Customer Balance 0-30 days…

1. For items (a)-G), analyze the transaction to determine effects on specific financial statement accounts and the overall accounting equation. (Enter any decreases to Assets, Liabilities, or Stockholders Equity with a minus sign. Do not round intermediate calculations.)

1. For items (a)-G), analyze the transaction to determine effects on specific financial statement accounts and the overall accounting equation. (Enter any decreases to Assets, Liabilities, or Stockholders Equity with a minus sign. Do not round intermediate calculations.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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[The following information applies to the questions displayed below.] Web Wizard, Inc., 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 $30,000 on credit. On January 31, the company estimated bad debts using 1 percent of credit sales. On February 4, the company collected $15,000 of accounts receivable. On February 15, the company wrote off a $200 account receivable. During February, the company provided services for $20,000 on credit. On February 28, the company estimated bad debts using 1 percent of credit sales. On March 1, the company loaned $2,800 to an employee, who signed a 6% note, due in 6…
[The following information applies to the questions displayed below.] Web Wizard, Inc., 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 $30,000 on credit. On January 31, the company estimated bad debts using 1 percent of credit sales. On February 4, the company collected $15,000 of accounts receivable. On February 15, the company wrote off a $200 account receivable. During February, the company provided services for $20,000 on credit. On February 28, the company estimated bad debts using 1 percent of credit sales. On March 1, the company loaned $2,800 to an employee, who signed a 6% note, due in 6…
[The following information applies to the questions displayed below.] Web Wizard, Inc., 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 $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%…
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 $45,000 on credit. b. On January 31, the company estimated bad debts using 2 percent of credit sales. c. On February 4, the company collected $22,500 of accounts receivable. d. On February 15, the company wrote off $200 account receivable. e. During February, the company provided services for $35,000 on credit. On February 28, the company estimated bad debts using 2 percent of credit sales.. g. On March 1, the company loaned $2,000 to an employee, who signed a 6% note, due in 6 months. h. On March 15, the company collected $200 on…
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 $31,000 on credit. b. On January 31, the company estimated bad debts using 2 percent of credit sales. c. On February 4, the company collected $15,500 of accounts receivable. d. On February 15, the company wrote off $150 account receivable. e. During February, the company provided services for $21,000 on credit. f. On February 28, the company estimated bad debts using 2 percent of credit sales. g. On March 1, the company loaned $2,600 to an employee, who signed a 6% note, due in 6 months. h. On March 15, the company collected $150…
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 $31,000 on credit. b. On January 31, the company estimated bad debts using 2 percent of credit sales. c. On February 4, the company collected $15,500 of accounts receivable. d. On February 15, the company wrote off $150 account receivable. e. During February, the company provided services for $21,000 on credit. f. On February 28, the company estimated bad debts using 2 percent of credit sales. g. On March 1, the company loaned $2,600 to an employee, who signed a 6% note, due in 6 months. h. On March 15, the company collected $150…
Web Wizard, Inc., 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 a $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…
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 $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 $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…
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 $44,000 on credit. b. On January 31, the company estimated bad debts using 1 percent of credit sales. c. On February 4, the company collected $22,000 of accounts receivable. d. On February 15, the company wrote off $150 account receivable. e. During February, the company provided services for $34,000 on credit. f. On February 28, the company estimated bad debts using 1 percent of credit sales. g. On March 1, the company loaned $2,200 to an…
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…
Innovative Tech Inc. (ITI) has been using the percentage of credit sales method to estimate bad debts. During November, ITI sold services on account for $130,000 and estimated that 3/4 of 1 percent of those sales would be uncollectible. Required: 1. Prepare the November adjusting entry for bad debts. 2. Starting in December, ITI switched to using the aging method. At its December 31 year-end, total Accounts Receivable is $89,900, aged as follows: (1) 1–30 days old, $74,000; (2) 31–90 days old, $12,000; and (3) more than 90 days old, $3,900. The average rate of uncollectibility for each age group is estimated to be (1) 12 percent, (2) 24 percent, and (3) 48 percent, respectively. Prepare a schedule to estimate an appropriate year-end balance for the Allowance for Doubtful Accounts. 3. Before the end-of-year adjusting entry is made, the Allowance for Doubtful Accounts has a $1,550 credit balance at December 31. Prepare the December 31 adjusting entry. 4. Show how the various accounts…
Innovative Tech Inc. (ITI) has been using the percentage of credit sales method to estimate bad debts. During November, ITI sold services on account for $100,000 and estimated that 3/4 of 1 percent of those sales would be uncollectible. Required: Prepare the November adjusting entry for bad debts. Starting in December, ITI switched to using the aging method. At its December 31 year-end, total Accounts Receivable is $93,200, aged as follows: (1) 1–30 days old, $77,000; (2) 31–90 days old, $12,000; and (3) more than 90 days old, $4,200. The average rate of uncollectibility for each age group is estimated to be (1) 12 percent, (2) 24 percent, and (3) 48 percent, respectively. Prepare a schedule to estimate an appropriate year-end balance for the Allowance for Doubtful Accounts. Before the end-of-year adjusting entry is made, the Allowance for Doubtful Accounts has a $1,700 credit balance at December 31. Prepare the December 31 adjusting entry. Show how the various accounts…