[The following information applies to the questions displayed below.] Web Wizard
ID: 2396665 • Letter: #
Question
[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.
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 $1,290.
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Last part. Having issues organizing and finding numbers because of problems with Journal.
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.
Number of Days Unpaid Customer Total0-30 31-60 61-90 Over 90 $ 200 $ 100 $ 80 $ 20 Alabama Tourism Bayside Bungalows Others (not shown to save space) 18,8007,700 9,300 1,000 800 490 $ 490 Xciting Xcursions 400 400 $19,890 $8,200 $9,380 $1,020 $1,290 Total Accounts Receivable Estimated uncollectible %) 3% 15% 20% 30%Explanation / Answer
Answers
Customer
Total
0-30
31-60
61-90
Over 90
Alabama
$ 200.00
$ 100.00
$ 80.00
$ 20.00
Bayside
$ 490.00
$ 490.00
Others
$ 18,800.00
$ 7,700.00
$ 9,300.00
$ 1,000.00
$ 800.00
Xciting
$ 400.00
$ 400.00
Total [A]
$ 19,890.00
$ 8,200.00
$ 9,380.00
$ 1,020.00
$ 1,290.00
Estimated Uncollectible [B]
3%
15%
20%
30%
Adjusted Allowance for Doubtful account balance [A x B]
$ 2,244.00
$ 246.00
$ 1,407.00
$ 204.00
$ 387.00
Adjusted Allowance for Doubtful account balance
$ 2,244.00 [calculated above]
Balance before 'j' transaction
$ 1,290 [given in question]
Amount by which the account is required to be credited with
$ 954.00 [2244 – 1290]
Transaction no
Account title
Debit
Credit
10 [i]
Interest Receivables
$ 15.00
Interest Revenue
$ 15.00
11 [j]
Bad Debt Expenses
$ 954.00
Allowance for Doubtful Accounts
$ 954.00
Partial Balance Sheet
at Mar 31
Assets
Current Assets:
Accounts receivables
$ 19,890.00
Allowances for Doubtful Accounts
$ (2,244.00)
$ 17,646.00
Notes Receivables
$ 3,000.00
Interest Receivables
$ 15.00
Customer
Total
0-30
31-60
61-90
Over 90
Alabama
$ 200.00
$ 100.00
$ 80.00
$ 20.00
Bayside
$ 490.00
$ 490.00
Others
$ 18,800.00
$ 7,700.00
$ 9,300.00
$ 1,000.00
$ 800.00
Xciting
$ 400.00
$ 400.00
Total [A]
$ 19,890.00
$ 8,200.00
$ 9,380.00
$ 1,020.00
$ 1,290.00
Estimated Uncollectible [B]
3%
15%
20%
30%
Adjusted Allowance for Doubtful account balance [A x B]
$ 2,244.00
$ 246.00
$ 1,407.00
$ 204.00
$ 387.00
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