Aging of Receivables; Estimating Allowance for Doubtful Accounts Trophy Fish Company supplies flies and fishing gear products to sporting goods stores and outfitters throughout the western United States. The accounts receivable clerk for Trophy Fish 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 AAA Outfitters 20,200 20,200 Brown Trout Fly Shop 7,000 7,000 Zigs Fish Adventures Subtotals 4,200 1,299,600 750,100 4,200 284,100 127,200 35,600 23,900 78,700 The following accounts were unintentionally omitted from the aging schedule: Customer Due Date Balance Adams Sports and Flies May 22 $5,400 Blue Dun Flies Oct. 10 4,500 Cicada Fish Co. Sept. 29 8,400 Deschutes Sports Oct. 20 7,300 Green River Sports Nov. 7 3,000 Smith River Co. Nov. 28 2,500 Western Trout Company Dec. 7 6,300 Wolfe Sports Jan. 20 4,500 Trophy Fish has a past history of uncollectible accounts by age category, as follows: Age Class Not past due 1-30 days past due Percent Uncollectible 1 % 2 31-60 days past due 11 61-90 days past due 29 91-120 days past due 41 Over 120 days past due 76 Trophy Fish Company Aging of Receivables Schedule December 31, 2017 Customer AAA Outfitters Days Past Due Balance Not Past Due 1-30 20,200 20,200 Days Past Due 31-60 Days Past Due 61-90 Days Past Due 91-120 Days Past Due Over 120 Brown Trout Fly Shop 7,000 7,000 Zigs Fish Adventures 4200 4200 Subtotals 1,299,600 750,100 284,100 127,200 35,600 23,900 78,700 Adams Sports and Flies 5,400 Blue Dun Flies 4,500 Cicada Fish Co. 8,400 4,500 V 8,400 Deschutes Sports 7,300 7,300 Green River Sports 3,000 3,000 Smith River Co. 2,500 2,500 Western Trout Company 6.300 6,300 Wolfe Sports 4,500 4,500 Totals 1,341,500 754,600 Percent uncollectible (%) 15% " 29% 42 X% X % Estimate of uncollectible accounts 3. Estimate the allowance for doubtful accounts, based on the aging of receivables schedule. D 4. Assume that the allowance for doubtful accounts for Trophy Fish has a credit balance of $3,600 before adjustment on December 31, 2017. Journalize the adjustment for uncollectible accounts. Dec. 31 Feedback Feedback 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 overstated by s In addition, the stockholders' equity (retained earnings) would be overstated by s because the allowance for doubtful accounts would be understated because bad debt expense would be by 5 understated and net income overstated by S on the income statement