Elite Events Corporation has provided event planning

services for several #2780

Elite Events Corporation has provided event planning 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 $300,000
on credit.b. On January 31, the company estimated bad debts using 1 percent of credit sales.c.
On February 4, the company collected $250,000 of accounts receivable.d. On February 15, the
company wrote off a $3,000 account receivable.e. During February, the company provided
services for $250,000 on credit.f. On February 28, the company estimated bad debts using 1
percent of credit sales.g. On March 1, the company loaned $15,000 to an employee who signed
a 4% note, due in9 months.h. On March 15, the company collected $3,000 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
$9,000.Required:1. For items a-j, analyze the amount and direction (1 or 2) 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:
Elite Events Corporation has provided event planning services for several

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