Aging of Receivables; Estimating AlBlowance for Deubtful Accounts folowing partially completed aging of recelvables schedule as of the end of business on December 31, 207 Due 1-30 31-60 6190 91-120 over 120 AAA Outfitters 19,600 19,600 8,000 8,000 1,303,200 752,300 281,900 82,300 The following accounts were unintentionally omitted from the aging schedule Customer Adams Sports and Flies Blue Dun Flles Cicada Fish Co. Deschutes Sports Green River Sports Smith River Co. Western Trout Company Wolfe Sports Due Date Balance May 22 Oct. 10 Sept. 29 Oct. 20 Now. 7 Nov. 28 Dec. an, 20 $4,600 7,100 4,000 2,600 6,400 4,100 Trophy Fish has a past history of uncollectible accounts by age category, as follows: Percent 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 Required 1. Determine the number of days past due for each of the preceding accounts. If an account is not past due, enter a zero. Customer Adams Sports and Flies Blue Dun Flies Cicada Fish Co. Deschutes Sports Green River Sports Smith River Co. Western Trout Company Wolfe Sports Uncollectible 1% 2 32 39 Due Date May 22 Oct. 10 Sept. 29 Oct. 20 Nov. 7 Nov. 28 Dec. 7 Jan. 20 Number of Days Past Due 223 Vdays 82 days 94 x days 72 days 54 Vdays 33 days 24 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. Trophhy Fth Company Aging of Recevables Sthedule December 31, 20Y7 Balance Not P Due Days Past Due 130 Days Past Die 3140 Days Pat Dae 6140 Drys Past Dae 9-120 Drs Pat Dae Oer 120 AAA Outfitters 19,600 19,600 Brown Trout Ry Shop Zigs Fish Adventures Subtotals 1,303,200 752,300281,900 1,800 21,700 Adams Sports and Fles Bue Dun Fles Cicada Fish Co. Deschutes Sports Green River Sports Srith Rver Ca. Western Trout Company Wolfe Sports ,300000000 Western Trout Company Wolfe Sports Totals Percent uncollectible (%) Estimate of uncollectible accounts Check My Work Add the accounts into the aging schedule based on their number of days past due Apply the respective uncolecible percentage to the total receivables in each days past due group and the not past due group Learning Objective 4 3. Estimate the allowance for doubtful accounts, based on the aging of receivables schedule. 4. Assume that the allowance for doubtful accounts for Trophy Fish has a credit balance of $3,300 before adjustment on December 31, 20Y7. Journalize the adjustment for uncollectitble accounts. Dec. 31 ad Debt Expense Allowance for Doubtful Accounts The amount of bad debt expense is affected by the balance in the allowance account Learning Objective 4 s. Assume that the adjusting entry in (4) was inadvertent y omitted, how would the omission affect the balance sheet and income statement, On the balance sheet, assets would be overstated by equity (retained earnings) would be overstated by because the allowance for doubtful accounts would be understated by because bad debt expense would be understated and net income overstated In addition, the stockholders by on the income
