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, 2001: Days Past Due Customer Balance Not Past Due 1-30 31-60 61-90 91-120 over 120 Subtotals 867,700 481,700 208,200 95,400 32,100 28,600 21,700 The following accounts were unintentionally omitted from the aging schedule: Customer Due Date Balance Arcade Beauty May 28, 20Y1 $3,200 Creative Images Sept. 7, 2011 6,600 Excel Hair Products 900 First Class Hair Care Oct. 17, 2081 Oct. 24, 20Y1 Nov. 23, 20Y1 2,200 Golden Images 700 Oh The Hair Nov. 29, 20Y1 3,800 Dec. 2, 20Y1 2,400 One Stop Hair Designs Visions Hair and Nail Jan. 5, 20Y2 8,100 Wig Creations has a past history of uncollectible accounts by age category, as follows: Age Class Percent Uncollectible Not past due 2 % 4 10 15 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: 35 80 1. Determine the number of days past due for each of the preceding accounts. If an account is not past due, enter a zero. Due Date Number of Days Past Due Customer Arcade Beauty May 28, 20Y1 days Creative Images 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, 2011 days One Stop Hair Designs Dec. 2, 20Y1 II days Visions Hair and 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, 2011 Days Past Due Days Past Due Days Past Due 1-30 31-60 61-90 Customer Balance Not Past Due Days Past Due 91-120 Days Past Due Over 120 Subtotals Arcade Beauty Creative Images Excel Hair Products First Class Hair Care Golden Images OLULII00 ODIILID OPODDDDDD OPE 000 Oh The Hair One Stop Hair Designs Visions Hair and Nail Total Percent uncollectible 2% 4% 10% 15% 35% 80% 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 $1,460 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 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