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, 20Y7:

			Not		Days Past Due
			Past
Customer	Balance		Due		1-30		31-60		61-90		91-120		Over 120
AAA Outfitters	19,000		19,000
Brown Trout Fly Shop	7,200						7,200
Zigs Fish Adventures	3,800				3,800
Subtotals	1,302,500		745,600		297,500		122,000		38,400		23,700		75,300

The following accounts were unintentionally omitted from the aging schedule:

Customer	Due Date		Balance
Adams Sports and Flies		May 22	$5,500
Blue Dun Flies		Oct. 10	4,700
Cicada Fish Co.		Sept. 29	8,500
Deschutes Sports		Oct. 20	7,400
Green River Sports		Nov. 7	3,200
Smith River Co.		Nov. 28	1,900
Western Trout Company		Dec. 7	7,300
Wolfe Sports		Jan. 20	4,100

Trophy Fish has a past history of uncollectible accounts by age category, as follows:

Age Class	Percent Uncollectible
Not past due	1	%
1-30 days past due	3
31-60 days past due	10
61-90 days past due	30
91-120 days past due	39
Over 120 days past due	81

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.

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.

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 $3,500 before adjustment on December 31, 20Y7. 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?

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 Due Date Number of Days Past Due Adams Sports and Flies May 22 days Blue Dun Flies Oct. 10 days Cicada Fish Co. days Deschutes Sports Green River Sports Sept. 29 Oct. 20 Nov. 7 Nov. 28 days days Smith River Co. days Western Trout Company days Dec. 7 Jan. 20 Wolfe Sports days Trophy Fish Company Aging of Receivables Schedule December 31, 2017 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 Customer AAA Outfitters Brown Trout Fly Shop Balance 19,000 7,200 Not Past Due 19,000 7,200 3800 Zigs Fish Adventures Subtotals Adams Sports and Flies 3800 1,302,500 745,600 297,500 122,000 38,400 23,700 75,300 Blue Dun Flies Cicada Fish Co. Deschutes Sports Green River Sports Smith River Co. Western Trout Company Wolfe Sports Totals Percent uncollectible (%) 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 Trophy Fish has a credit balance of $3,500 before adjustment on December 31, 2017. Journalize the adjustment for uncollectible accounts. 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, assets would be earnings) would be by $ because the allowance for doubtful accounts would be because bad debt expense would be and net income by $ by $ . In addition, the stockholders' equity (retained on the income statement. by $