Miller Wigs Company supplies wigs and hair care products to beauty salons throughout California and the Pacific Northwest. The accounts receivable clerk for Miller Wigs prepared the following partially completed aging-of-receivables schedule as of the end of business on December 31, 2007:

The following accounts were unintentionally omitted from the aging schedule:

Miller Wigs has a past history of uncollectible accounts by age category, as follows:
Percentage
Age Class Uncollectible
Not past due ........ 2%
1–30 days past due ... 4
31–60 days past due .. 10
61–90 days past due .. 15
91–120 days past due . 35
Over 120 days past due . 80

Instructions
1. Determine the number of days past due for each of the preceding accounts.
2. Complete the aging-of-receivables schedule.
3. Estimate the allowance for doubtful accounts, based on the aging-of-receivables schedule.
4. Assume that the allowance for doubtful accounts for Miller Wigs has a credit balance of $11,350 before adjustment on December 31, 2007. Illustrate the effect on the accounts and financial statements of the adjustment for uncollectibleaccounts.

Transcribed Image Text:

Days Past Due Not Past Balance Due 1-30 31-6061-90 91-120 Over 120 Customer Daytime Beauty $20,000 $20,000 Blount Wigs $11,000 $11,000 Zabka's 2,900 780,000 398,60097,250 98,750 33,300 29,950 22,150 2,900 Subtotals Customer Due Date Balance S900 4,000 1,200 1,100 1,500 Houseal Uniquely Yours Country Designs Treat's Molina's Beauty Store Ginburg Supreme Steve's Hair Products Hairy's Hair Care VanDiver's Images Lopez Hair Styling Josset Ritz Cool Designs Buttram Images July 1, 20017 Aug. 2, 2007 Sept. 9, 2007 Sept. 29, 2007 Oct. 10, 2007 Oct. 17, 2007 Oct. 31, 2007 Nov. 18, 2007 Nov. 28, 2007 Nov. 30, 2007 Dec. 1, 2007 Jan. 3, 2008 2,000 700 1,800 3,500 1,000 6,200