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, 2011: Days Past Due Customer Balance Not Past Due 1-30 31-60 61-90 91-120 Over 120 Subtotals 690,300 383,100 165,700 75,900 25,500 22,800 17,300 The following accounts were unintentionally omitted from the aging schedule: Customer Due Date Balance Arcade Beauty May 28, 2011 $2,700 Creative Images Sept. 7, 2011 5,700 Excel Hair Products Oct. 17, 20Y1 800 First Class Hair Care Oct. 24, 2071 1,900 Golden Images Nov. 23, 2011 600 Oh That Hair Nov. 29, 2011 3,300 One Stop Hair Designs Dec. 2, 2011 2,100 Visions Hair & Nail Jan. 5, 2012 7,000 Wig Creations has a past history of uncollectible accounts by age category, as follows: Age Class Uncollectible Not past due 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 85 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 Arcade Beauty May 28, 2011 days Creative Images Sept. 7, 2011 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, 2011 days days One Stop Hair Designs Dec. 2, 20Y1 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, 2041 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 Customer Balance Subtotals Arcade Beauty Creative Images Excel Hair Products First Class Hair Care un Golden Images Oh That Hair One Stop Hair Designs Visions Hair & Nail Total 1% 3% 12% 180 40% 85% 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 Wig Creations has a credit balance of $1,670 before adjustment on December 31, 2011. 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 tamainada 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 owner's capital account would be by because bad debt expense would be and net income by on the income statement