Question
Aging of Receivables; Estimating The contra asset account for accounts receivable.Allowance for Doubtful Accounts Trophy Fish Company supplies flies and fishing gear products to sporting
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Aging of Receivables; Estimating The contra asset account for accounts receivable.Allowance for Doubtful Accounts
Trophy Fish Company supplies flies and fishing gear products to sporting goods stores and outfitters throughout the western United States. The A claim against the customer created by selling merchandise or services on credit.accounts receivable clerk for Trophy Fish prepared the following partially completed aging of receivables schedule as of the end of business on December 31, 20Y7:
Not Days Past Due Past Customer Balance Due 1-30 31-60 61-90 91-120 Over 120 AAA Outfitters 21,000 21,000 Brown Trout Fly Shop 7,400 7,400 Zigs Fish Adventures 4,300 4,300 Subtotals 1,305,500 744,900 297,800 129,800 37,000 18,100 77,900 The following accounts were unintentionally omitted from the aging schedule:
Customer Due Date Balance Adams Sports and Flies May 22 $4,900 Blue Dun Flies Oct. 10 4,500 Cicada Fish Co. Sept. 29 8,700 Deschutes Sports Oct. 20 7,300 Green River Sports Nov. 7 3,700 Smith River Co. Nov. 28 2,800 Western Trout Company Dec. 7 6,600 Wolfe Sports Jan. 20 4,800 Trophy Fish has a past history of uncollectible accounts by age category, as follows:
Age Class Percent Uncollectible Not past due 1 % 1-30 days past due 2 31-60 days past due 8 61-90 days past due 32 91-120 days past due 41 Over 120 days past due 76 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 Adams Sports and Flies May 22 days Blue Dun Flies Oct. 10 days Cicada Fish Co. Sept. 29 days Deschutes Sports Oct. 20 days Green River Sports Nov. 7 days Smith River Co. Nov. 28 days Western Trout Company Dec. 7 days Wolfe Sports Jan. 20 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.
Trophy Fish Company Aging of Receivables Schedule December 31, 20Y7 Customer Balance 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 AAA Outfitters 21,000 21,000 Brown Trout Fly Shop 7,400 7,400 Zigs Fish Adventures 4300 4300 Subtotals 1,305,500 744,900 297,800 129,800 37,000 18,100 77,900 Adams Sports and Flies Blue Dun Flies Cicada Fish Co. Deschutes Sports Green River Sports Smith River Co. Western Trout Company Wolfe Sports Totals Percent uncollectible (%) % % % % % % Estimate of uncollectible accounts $ $ $ $ $ $ $ Feedback
3. Estimate the allowance for doubtful accounts, based on the aging of receivables schedule. $
Feedback
4. Assume that the allowance for doubtful accounts for Trophy Fish has a credit balance of $3,000 before adjustment on December 31, 20Y7. Journalize the adjustment for uncollectible accounts.
Dec. 31 - Accounts Payable
- Accounts Receivable
- Allowance for Doubtful Accounts
- Bad Debt Expense
- Cash
- Sales
- Accounts Payable
- Accounts Receivable
- Allowance for Doubtful Accounts
- Bad Debt Expense
- Cash
- Sales
Feedback
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
- overstated
- understated
- overstated
- understated
- overstated
- understated
- overstated
- understated
- overstated
- understated
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