Aging of Receivab : Estimating Allowance for Doubtful Accounts wie 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 end of business on December 31, 2017: Not Days Past Due Past Customer Balance Due 1-30 31-60 61-90 91-120 Over 120 ABC Beauty 15,000 15,000 Angel Wigs ...5.000----------3.000.... Zodiac Beauty 3,000 --------- ------ -- Subtotals 875,000 415,000 210,000 112,000 55,000 18,000 65,000 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 Customer Due Date Balance Arcade Beauty Aug. 17 10,000 Creative Images Oct. 30 8,500 Excel Hair Products July 3 7,500 Fest Class Hair Care Sept 6.000 Golden Images Nov. 23 3,600 Oh That Hair Nov. 29 1,400 One Stop Hair Designs Dec 7 4,000 Visions Hair & Nail Jan. 119,000 Wig Creation has a past history of uncollectible accounts by age category, as follows: Percent Uncollectible Age Class Not past due 1-30 days past due 31-60 days past due 61-90 days past due 91-120 days past due Over 120 days past due 1. Determine the number of days past due for each of the preceding accounts. If an account is not past du enter a ter Customer Due Date Number of Days Past Due Arcade Beauty Aug. 171 days Creative Images Oct. 30 days Excel Hair Products July 3 First Class Hair Care Sept Golden Images Now. 23 Oh That Hair Nov. 29 days One Stop Hair Designs Dec. 7 days Visions Hair & Nail Jan. 11 days 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 Wig Creations Company Aging of Receivables Schedule December 31, 2017 Not Past Days Post Days Past Days Past Days Past Days Past Due Due 1-30 1-0 Due 61-90 Due 91-120 Due Over ABC Beauty $15.000 Angel Wigs Zodiac Beauty Subtotals Beauty Creative Excel Ha First Class Hair Care Golden Images Oh That One Stop Den Visions Hali 2731110 Total uncollectible Estimate of unclectibles 3. Estimate the allowance for doubtful accounts, based on the aging of receivables schedule. 4. Assume that the allowance for doubtful accounts for Wie Creations has a credit balance of $7,375 before adjustment on December 31. Journalize the adjustment for uncollectible accounts. If an amount box does not require an entry, leave it blank. Dec. 31 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, aspets would be by because the allowance for doubtful accounts would be by $ . In addition, the stockholders' equity (retained earnings) would be by s because bad debt expense would be and net income on the income statement 6 more Check My Work uses remain Aging of Receivables Estimating Allowance for Doubtful Accounts Wig Creations Company supplies wigs and hair care products to beauty salons throughout Texas the Southwest. The accounts receivable clerk for Wig Creations prepared the following sarily completed aping of receivables schedule as of the end of business on December 31, 2017 Days Past Due Not Past Due 15,000 1-30 31-60 61-90 91-120 Over 120 Customer ABC Beauty Angel Wigs Balance 15,000 8,000 Zodiac Beauty Subtotal 3,000 75,000 3,000 210.000 415,000 112,000 55.000 65.000 18.000 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. Customer Due Date Balance Arcade Beauty Aug. 17 10,000 Creative Images Oct. 30 8,500 Excel Hair Products July 3 7,500 First Class Hair Care Sept. 8 6,600 Golden Images Nov. 23 3,600 Oh That Hair Nov, 29 1,400 One Stop Hair Designs Dec. 7 4,000 Visions Hair & Nail jan. 119,000 Wig Creations has a past history of uncollectible accounts by age category, as follows: Age Class Percent Uncollectible Not past due 1-30 days past due 31-60 days past due 61-90 days past due 91-120 days past due Over 120 days past due days Required: 1. Determine the number of days past due for each of the preceding accounts. If an account past due, enter a zero. Customer Due Date Number of Days Past Due Arcade Beauty Aug. 17 Creative Images Oct. 30 days Excel Hair Products July 3 days First Class Hair Care Sept. 8 days Golden Images Nov. 23 days On That Hair Nov. 29 days One Stop Hair Designs Dec. 7 days Visions Hair & Nail Jan. 11 days 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. Wig Creations Company Aging of Receivables Schedule December 31, 2017 Days Past Days Past Days Past Days Past Not Past Days Past Due 11-60 Dua 61-90 Due 91-120 Due Over Customer Balance ABC Beauty $15,000 $15,000 Angel Wigs 8.000 Zodiac 875.000 Images Products poollll): 0 One Stop Der and Nal INDER 2. B e the awance for doubtful accounts, based on the aging of receivables schedule. A t the towance for doubtful accounts for Wig Creations has a credit balance of 57,375 before set on December 31. Journalize the adjustment for uncollectible accounts. If an amount box does not require an entry, leave it blank. Dec. 1 5. Asume that the adjusting entry in (4) was inadvertently omitted, how would the omission affect the balance sheet and income statement? On the balance sheet s would be by because the allowance for doubtful countr y . In addition, the stockholders' equity (retained earnings by because bad debt expense would be and net income bys on the income statement