accounting 8-2B

a. Bad debt expense for the year. b. Balance in the allowance account after the adfustment of December 31 . c. Expected net realizable value of the accounts receivable as of December 31 . PR 8-2B Aging of receivables; estimating allowance for doubtful accounts Wig Creations Company supplies wigs and haif 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 end of business on December 31,20Y7; The following accounts were unintentionally omitted from the aging schedule- Assume all due dates are for the current year except for Visions Hair \& Nail. which is due in the next year. Wig Creations has a past history of uncollectible accounts by age category, as follows: Instructions 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 Wig Creations has a credit balance of \$7,375 before adjustment on December 31. Journalize the adjustment for uncollectible accounts. 5. Assuming that the adjusting entry in (4) was inadvertently omitted, how would the: omission affect the balance sheet and income statement? PR 8-3B Compare two methods of accounting for uncollectible receivables Ob]. 3,4,5 Digital Depot Company, which operates a chain of 40 electronics supply stores, has just completed its fourth year of operations. The direct write-off method of recording bad debt expense has been used during the entire period. Because of substantial increases in sales volume and the amount of