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
2. During January, the company provided services for $37000 on credit
b. On January 31 the company estimated bad debts using 2 percent of credit sales.
On February 4 the company collected $18.500 of accounts receivable
d on February 15, the company wrote off $150 account receivable.
e During February, the company provided services for $27,000 on credit
On February 28 the company estimated bad debts using 2 percent of credit sales
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 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 $1170
Total
5.230
Number of Days Unpaid
31 to be 61 to
$9
Over
$ 110
Customer
A Touri
Bayside bungalows
Others to show to save space)
xciting Xcursions
Total Accounts Receivable
Estimated collectie
16.00
5370
5.50
39
3.100
1.100
$17.500
S 3.1
5.1.1
5 1.270
103