Aging of Receivables; Estimating Allowance for Doubtful Accounts Wig 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, 20Y1: Days Past Due Customer Balance Not Past Due 1-30 31-60 61-90 91-120 over 120 Subtotals 688,000 381,800 165,100 75,700 25,500 22,700 17,200 The following accounts were unintentionally omitted from the aging schedule: Customer Due Date Balance Arcade Beauty May 28, 201 $3,000 Creative Images Sept. 7, 20Y1 6,200 Excel Hair Products Oct. 17, 201 800 First Class Hair Care Oct. 24, 201 2,100 Golden Images Nov. 23, 20Y1 700 Oh The Hair Nov. 29, 20Y1 3,600 One Stop Hair Designs Dec. 2, 20Y1 2,300 Visions Hair and Nail Jan. 5, 2012 7,600 Wig Creations has a past history of uncollectible accounts by age category, as follows: Age Class: Percent 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 2% 31-60 days past due 12 61-90 days past due 18 91-120 days past due Over 120 days past due Required: 275 40 75 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 Arcade Beauty Creative Images Due Date Number of Days Past Due May 28, 2011 days Sept. 7, 20Y1 days Excel Hair Products Oct. 17, 20Y1 days First Class Hair Care Oct. 24, 20Y1 days Golden Images Nov. 23, 20Y1 days Oh The Hair Nov. 29, 201 days One Stop Hair Designs Dec. 2, 201 days Oh The Hair Nov. 29, 2011 days One Stop Hair Designs Dec. 2, 20Y1 Visions Hair and Nail Jan. 5, 2012 days 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. Customer Balance Not Past Due Subtotals Wig Creations Company Aging of Receivables Schedule December 31, 20Y1 Days Past Due 1-30 Days Past Due Days Past Due Days Past Due 31-60 61-90 91-120 Days Past Due Over 120 Arcade Beauty Creative Images Excel Hair Products First Class Hair Care Golden Images Oh The Hair One Stop Hair Designs Visions Hair and Nall Total 00000000 0000 000 00000 0000 00000 Designs Visions Hair and Nail Total DO Percent uncollectible 2% 4% 12% 18% 40% 75% 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 Wig Creations has a credit balance of $1,700 before adjustment on December 31, 20Y1. 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? On the balance sheet, assets would be by would be by because bad debt expense would be ( on the income statement. because the allowance for doubtful accounts In addition, the owner's capital account would be l and net income by by