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	20,100		20,100
Brown Trout Fly Shop	8,000						8,000
Zigs Fish Adventures	4,400				4,400
Subtotals	1,299,900		743,000		292,300		128,900		44,700		15,600		75,400

The following accounts were unintentionally omitted from the aging schedule:

Customer	Due Date		Balance
Adams Sports and Flies		May 22	$4,700
Blue Dun Flies		Oct. 10	5,200
Cicada Fish Co.		Sept. 29	8,800
Deschutes Sports		Oct. 20	6,600
Green River Sports		Nov. 7	3,900
Smith River Co.		Nov. 28	2,300
Western Trout Company		Dec. 7	6,800
Wolfe Sports		Jan. 20	4,400

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	2
31-60 days past due	8
61-90 days past due	29
91-120 days past due	40
Over 120 days past due	79

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	Due Date	Number of Days Past Due
Adams Sports and Flies	May 22	days
Blue Dun Flies	Oct. 10	days
Cicada Fish Co.	Sept. 29	days
Deschutes Sports	Oct. 20	days
Green River Sports	Nov. 7	days
Smith River Co.	Nov. 28	days
Western Trout Company	Dec. 7	days
Wolfe Sports	Jan. 20	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.

Trophy Fish Company
Aging of Receivables Schedule
December 31, 20Y7
Customer	Balance	Not Past Due	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
AAA Outfitters	20,100	20,100
Brown Trout Fly Shop	8,000			8,000
Zigs Fish Adventures	4400		4400
Subtotals	1,299,900	743,000	292,300	128,900	44,700	15,600	75,400
Adams Sports and Flies
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 $4,600 before adjustment on December 31, 20Y7. 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 by $ because the allowance for doubtful accounts would be by $. In addition, the stockholders equity (retained earnings) would be by $ because bad debt expense would be and net income by $ on the income statement.

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