Capri Wigs Company supplies wigs and hair care products to beauty salons throughout California and the Pacific Northwest The accounts receivable clerk for Capri Wigs prepared the following partially completed aging of receivables schedule as of the end of business on December 31, 2011 The following...

1 2 and 3 4 Bad Debt Expense 69250 Allowance for Doubtful Accounts 69250 Uncollectible a ...

Capri Wigs Company supplies wigs and hair care products to beauty salons throughout California and the Pacific

Question:

Capri Wigs Company supplies wigs and hair care products to beauty salons throughout California and the Pacific Northwest. The clerk for Capri Wigs prepared the following partially completed aging of receivables schedule as of the end of business on December 31, 2011:

Н A Days Past Due Not Past Due 91-120 Over 120 Customer 3 4 Absolute Beauty 5 Blonde Wigs Balance 15,000 8,000 61-90 1-

The following accounts were unintentionally omitted from the aging schedule:

Customer Due Date Balance All About Hair Dec. 2, 2011 $4,000 Amazing Hair Products Golden Images Oct. 17, 2011 1,000 Nov

Capri Wigs has a past history of uncollectible accounts by age category, as follows:

1. Determine the number of days past due for each of the preceding accounts.
2. Complete the aging of receivables schedule by adding the omitted accounts to the bottom of the schedule and updating the totals.
3. Estimate the allowance for doubtful accounts, based on the aging of receivables schedule.
4. Assume that the allowance for doubtful accounts for Capri Wigs has a credit balance of $3,040 before adjustment on December 31, 2011. Journalize the adjustment for uncollectible accounts.
5. Assume that the adjusting entry in (4) was inadvertently omitted, how would the omis-sion affect the balance sheet and income statement?

Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...