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 derk for Wig Creations prepared the following partially completed aging of receivables schedule as of the end of business on December 31, 2017: Not Days Past Due Past Customer Balance Due 1-30 31-60 61-90 91-120 Over 120 ABC Beauty 20,700 20,700 Angel Wigs 7,800 7,800 3,900 Zodiac Beauty Subtotals 3,900 291,900 The following accounts were unintentionally omitted from the aging schedule. Assume all due dates are for the current year except for Visions Hair & Nail, which is due in 1,300,900 757,700 120,600 37,300 18,000 75,400 the next year Customer Due Date Balance Arcade Beauty Aug. 17 $4,800 Creative Images Oct 30 4,600 Excel Hair Products July 3 8,300 First Class Hair Care Sept. 8 6,500 Golden Images Nov. 23 4,000 Oh That Hair Nov. 29 2,300 One Stop Hair Designs Dec. 7 7,100 Visions Hair & Nail Jan. 11 4,300 Wig Creations has a past history of uncollectible accounts by age category, as follows: Age Class Percent Uncollectible 1 % Not past due 1-30 days past due 31-60 days past due 2 10 61-90 days past due 28 38 91-120 days past due Over 120 days past due Required: 85 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 Aug. 17 days Creative Images Oct 30 days Excel Hair Products July 3 days First Class Hair Care Sept. 8 days Golden Images Nov. 23 days Oh That Hair Nov. 29 days One Stop Hair Designs Dec. 7 days Visions Hair & Nail Jan. 11 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 requis an entry, leave it blank. Wig Creations Company eBook Printem C 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, 2017 Not Past Due Balance 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 7,800 Customer ABC Beauty Angel Wigs Zodiac Beauty Subtotals Arcade Beauty Creative Images 20,700 20,700 7,800 3,900 1,300,900 757,700 3,900 291,900 120,600 37,300 18,000 75,400 Excel Hair Products First Class Hair Care Golden Images On That Hair One Stop Hair Designs Visions Hair & Nail Totals Percent uncollectible (9) Estimate of uncollectible accounts Estimate the alloween for dettuccounts, based on the son of receivable shenue Check My Work Save and out Submit Assignment for Grading NJEL BOOK Loom Excel Hair Products First Class Hair Care Golden Images Oh That Hair One Stop Hair Designs Visions Hair & Nail Totals % % % Percent uncollectible (9) Estimate of uncollectible accounts 3. Estimate the allowance for doubtful accounts, based on the soing of receivables schedule, 4. Assume that the allowance for doubtful accounts for Wig Creations has a credit balance of $4,600 before adjustment on December 31, 2017. Joumalize the adjustment for uncollectible accounts. If an amount box does not require an entry, leave it blank Dec. 31 5. Assume that the adjusting entry in (4) was inadvertently omitted, how would the mission 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 stockholders' equity (retained earnings) would be by because bad debt expense would be and net income by on the income statement
