Execusmart Consultants has provided business

consulting services for several years #2774

Execusmart Consultants has provided business consulting 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 of 2013.a. During January, the company provided services
for $200,000 on credit.b. On January 31, the company estimated bad debts using 1 percent of
credit sales.c. On February 4, the company collected $100,000 of accounts receivable.d. On
February 15, the company wrote off a $500 account receivable.e. During February, the
company provided services for $150,000 on credit.f. On February 28, the company estimated
bad debts using 1 percent of credit sales.g. On March 1, the company loaned $12,000 to an
employee who signed a 10% note, due in 3 months.h. On March 15, the company collected
$500 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. Allowance for Doubtful Accounts has an unadjusted credit balance
of $6,000.Required:1. For items a-j, analyze the amount and direction (+ or -) of effects on
specific financial statement accounts and the overall accounting equation and prepare journal
entries.2. Show how Accounts Receivable and related accounts would be reported in the
current assets section of a classified balance sheet.3. Name the accounts related to Accounts
Receivable and Note Receivable that would be reported on the income statement and indicate
whether they would appear before, or after, Income from Operations.View Solution:
Execusmart Consultants has provided business consulting services for several years

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