(The following 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 $37,000 on credit.
b. On January 31, the company estimated bad debts using 2 percent of credit sales.
c. On February 4, the company collected $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.
1. 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 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 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 $1,170.
to 30
$ 119
Over 90
Customer
Alabama Tourism
Bayside Bungalows
Others (not shown to save space)
Xciting Xcursions
Total Accounts Receivable
Estimated Uncollectible (%)
Total
$ 230
370
16,600
390
$ 17,590
Number of Days Unpaid
31 to 60 61 to 90
$ 90 $ 30
8,100 1,100
$ 370
900
6,500
390
$ 7,000
3%
$ 8,199
10%
$ 1,130
20%
1,270
30%
3. 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.)