Accounting 120 Principles of Accounting Chapter 9 Problems
Ch 9 Problems (Pr) eBook Aging of Receivables; Estimating Allowance for Doubtful Accounts ? 1. PR.09-02.ALGO Wig Creations Company supplies wigs and hair care products to beauty salons throughout Texas and the Southwest. The accounts receivable clerk for Wig Creations prepared the following partially completed aging of receivables schedule as of the 2. PR.09-04.ALGO end of business on December 31, 20Y1: Days Past Due Customer Balance Not Past Due 1-30 31-60 61-90 91-120 over 120 Subtotals 849,400 471,500 203,900 93,400 31,400 28,000 21,200 The following accounts were unintentionally omitted from the aging schedule: Customer Due Date Balance Arcade Beauty May 28, 20Y1 $2,600 Creative Images Sept. 7, 20Y1 5,500 Excel Hair Products Oct. 17, 20Y1 700 First Class Hair Care Oct. 24, 20Y1 1,800 Golden Images Nov. 23, 20Y1 600 Oh The Hair Nov. 29, 20Y1 3,100 One Stop Hair Designs Dec. 2, 20Y1 2,000 Visions Hair and Nail Jan. 5, 20Y2 6,700 Wig Creations has a past history of uncollectible accounts by age category, as follows: Age Class Percent 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 85Required: 1. PR.09-02.ALGO 1. Determine the number of days past due for each of the preceding accounts. If an account is not past due, enter a zero. 2. PR.09-04.ALGO Customer Due Date Number of Days Past Due Arcade Beauty May 28, 20Y1 days Creative Images Sept. 7, 20Y1 days Excel Hair Products Oct. 17, 20Y1 days First Class Hair Care Oct. 24, 20Y1 days Golden Images Nov. 23, 20Y1 days Oh The Hair Nov. 29, 20Y1 days One Stop Hair Designs Dec. 2, 20Y1 days Visions Hair and Nail Jan. 5, 20Y2 daysCh 9 Problems (Pr) 7 eBook 2. Complete the aging of receivables schedule by adding the omitted accounts to the bottom of the schedule and updating the totals. If an amount box does not require an entry, leave it blank. ? 1. PR.09-02.ALGO Wig Creations Company 2. PR.09-04.ALGO Aging of Receivables Schedule December 31, 20Y1 Customer Balance Not Past Due Days Past Due 1-30 Days Past Due 31-60 Days Past Due 61-90 Days Past Due 91-120 Days Past Due Over 120 Subtotals Arcade Beauty Creative Images Excel Hair Products First Class Hair Care Golden Images Oh The Hair One Stop Hair Designs Visions Hair and Nail Total Percent uncollectible 2% 4% 10% 15% 35% 85% Estimate of uncollectible accounts 3. Estimate the allowance for doubtful accounts, based on the aging of receivables schedule. $ 4. Assume that the allowance for doubtful accounts for Wig Creations has a credit balance of $1,480 before adjustment on December 31, 20Y1. Journalize the adjustment for uncollectible accounts. 5. Assume that the adjusting entry in (4) was inadvertently omitted, how would the omission affect the balance sheet and income statement? On the balance sheet, assets would be by because the allowance for doubtful accounts would be by . In addition, the owner's capital account would be by because bad debt expense would be and net income by on the income statement.Ch 9 Problems (Pr) 1 eBook Show Me How Details of Notes Receivable and Related Entries 1. PR.09-02.ALGO Gen-X Ads Co. produces advertising videos. During the current fiscal year, Gen-X Ads Co. received the following notes: 2. PR.09-04.ALGO Date Face Amount Interest Rate Term 1. Apr. 10 $69,000 4% 60 days 2. June 24 12,000 30 days 3. July 1 54,000 120 days 4. Oct. 31 54,000 60 days 5. Nov. 15 54,000 60 days 6. Dec. 27 108,000 30 days Required: Assume 360 days in a year. 1. Determine for each note (a) the due date and (b) the amount of interest due at maturity, identifying each note by number. (a) (b) Note Due Date Interest Due at Maturity (1) (2) (3) (4) (5) ( 6 ) 2. Journalize the entry to record the dishonor of Note (3) on its due date. If an amount box does not require an entry, leave it blank or enter "0". EE3. Journalize the adjusting entry to record the accrued interest on Notes (5) and (6) on December 31. Dec. 31 4. Journalize the entries to record the receipt of the amounts due on Notes (5) and (6) in January. If an amount box does not require an entry, leave it blank or enter "0". Jan. 14 0000 0000 0000 0000 Jan. 26 4 4
