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 910,100 505,100 218,400 100,100 33,700 30,000 22,800 The following accounts were unintentionally omitted from the aging schedule: Customer Due Date Balance Arcade Beauty May 28, 20Y1 $2,800 Creative Images Sept. 7, 2011 5,900 Excel Hair Products Oct. 17, 2011 800 First Class Hair Care Oct. 24, 2011 1,900 Golden Images Nov. 23, 20Y1 600 Oh That Hair Nov. 29, 20Y1 3,400 Dec. 2, 20Y1 2,200 One Stop Hair Designs Visions Hair & Nail Jan. 5, 20Y2 7,200 Wig Creations has a past history of uncollectible accounts by age category, as follows: Percent Uncollectible 1 % 3 3 12 Age Class Not past due 1-30 days past due 31-60 days past due 61-90 days past due 91-120 days past due Over 120 days past due Required: 18 40 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, 20Y1 o x days Creative Images Sept. 7, 2011 o x days Excel Hair Products Oct. 17, 20Y1 days First Class Hair Care Oct. 24, 2011 days Golden Images Nov. 23, 20Y1 0 X days Oh That Hair Nov. 29, 2011 o X days One Stop Hair Designs Dec. 2, 20Y1 o x days Visions Hair & Nail Jan. 5, 2012 days Feedback 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 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 Balance Customer 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 Estimate of uncollectible accounts 1% 3% 12% 18% 40% 85% 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 $1,540 before adjustment on December 31, 20Y1. Journalize the adjustment for uncollectible accounts. If an amount box does not require an entry, leave it blank. Accounts Payable Accounts Payable Feedback Check My Work
