Aging of Receivables; Estimating Alowance 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 Not Days Past Due Past Over Customer Balance Due 1-30 31-60 61-90 91-120 120 ABC Beauty 15,000 15,000 Angel Wigs 0,000 8,000 Zodiac Beauty Subtotals 3,000 875,000 415,000 3,000 210,000 112,000 $5,000 10,000 65,000 The following accounts were unintentionally omitted from the aging schedule: Customer Arcade Beauty Due Date Balance Aug. 17, 2011 $10,000 Creative Images Oct. 30, 2011 0,500 Excel Hair Products July 3, 2011 7,500 First Class Hair Care Sept. 8, 2011 6,600 Golden Images Nov. 23, 2011 1,600 Oh That Hair Nov. 29, 2011 1,400 One Stop Hair Design Dec. 7, 201 4,000 Visions Hair & Nail Jan. 11, 2012 9,000 Wig Creations has a past history of uncollectible accounts by age category, as follows: Wig Creations has a past history of uncollectible accounts by age category, as follows: Age Class Not past due 1-30 days past due 31-60 days past due 61-90 days past due Percent Uncollectible 1% 4 16 25 91-120 days past due 40 Over 120 days past due 80 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 Arcade Beauty Creative Images Due Date Aug. 17, 20Y1 Number of Days Past Due days Oct. 30, 20Y1 days Excel Hair Products July 3, 20Y1 days First Class Hair Care Sept. 8, 20Y1 days Golden Images Nov. 23, 20Y1 days Oh That Hair Nov. 29, 20Y1 days One Stop Hair Designs Dec. 7, 20Y1 days Visions Hair & Nail Jan. 11, 2012 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 1 Aging of Receivables Schedule December 31, 2011 Not Past Due Customer Balance Days Past Due 1-30 Days Past Due 31-60 Days Past Days Past Days Past Due Due 61-90 Due 91-120 Over 120 ABC Beauty $15,000 $15,000 Angel Wigs 3,000 0,000 Zodiac Beauty Subtotals Arcade Beauty Creative Images Excel Hair Products First Class Hair Care Golden Images On That Hair One Stop Hair Designs Visions Hair and Nail Total Percent uncollectible Estimate of uncollectible accounts 16 25% 40% 00% 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 $7,375 before adjustment on December 31, 2011. Joumalize the adjustment for uncollectible accounts. If an amount box does not require an entry, leave it blank 88 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 the owner's capital account would be, by on the income statement because the allowance for doubtful accounts would be because bad debt expense would be In addition, and net income)