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 581,200 322,600 139,500 63,900 21,500 19,200 14,500 The following accounts were unintentionally omitted from the aging schedule: Customer Arcade Beauty Due Date Balance May 28, 20Y1 $2,700 Creative Images Sept. 7, 20Y1 5,600 Excel Hair Products Oct. 17, 20Y1 700 First Class Hair Care Oct. 24, 20Y1 1,800 Golden Images Nov. 23, 20Y1 600 Oh That Hair Nov. 29, 20Y1 3,200 One Stop Hair Designs Dec. 2, 20Y1 2,000 Jan. 5, 20Y2 6,800 Visions Hair & Nail Wig Creations has a past history of uncollectible accounts by age category, as follows: Age Class Not past due Percent Uncollectible 1 % 1-30 days past due 3 31-60 days past due 12 61-90 days past due 18 91-120 days past due 40 Over 120 days past due 75 Due Date May 28, 20Y1 Sept. 7, 20Y1 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 Number of Days Past Due days days Excel Hair Products Oct. 17, 20Y1 days First Class Hair Care Oct. 24, 20Y1 days Golden Images Nov. 23, 20Y1 days Oh That Hair Nov. 29, 20Y1 days One Stop Hair Designs Dec. 2, 20Y1 days Visions Hair & Nail Jan. 5, 20Y2 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. Wig Creations Company Aging of Receivables Schedule December 31, 20Y1 Days Past Not Past Due Due 1-30 Days Past Due 31-60 Days Past Days Past Due 61-90 Due 91-120 Days Past Due Over 120 Customer Balance Subtotals Arcade Beauty Creative Images Excel Hair Products First Class Hair Care Golden Images Oh That Hair One Stop Hair Designs Visions Hair & Nail Total Percent uncollectible 1% 3% 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 $1,790 before adjustment on December 31, 20Y1. Journalize the adjustment for uncollectible accounts. If an amount box does not require an entry, leave it blank. 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 owner's capital account would be by by because the allowance for doubtful accounts would be because bad debt expense would be by In addition, the and net income by on