Aging of receivbbles; 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: W...mendith followine bartiallv completed aging of recelvables schedule as of the end of business on December 31,20Y7 The following accounts were unintentionolly omitted from the aging schedule. Assume all due dates are for the current year excenp ror Visions Hair B Nail, which is due in the next yeat. Wig Creations has a past history of uncollectible accounts by age category, as follows: Fequired: 1. Determine the number of days past due for each of the preceding accounts. If an account is not past due, enter a zero. 2. Complete the aging of recelvables schedule by adding the omitted accounts to the bottom of the schedule and updating the totals. If an ampunt box does not require an entry, leave it blanki 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 $4,300 before adjustment on December 31, 20Y7. Journalize the adjustment for uncollectible accounts. If an amount box does not require an entry, leave it blank. 5. Assuming 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 5 In addition, the stockholders' equity (retained earnings) would be by 5 because bad debt expense would be and net income by $ on the income statement. Aging of receivbbles; 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: W...mendith followine bartiallv completed aging of recelvables schedule as of the end of business on December 31,20Y7 The following accounts were unintentionolly omitted from the aging schedule. Assume all due dates are for the current year excenp ror Visions Hair B Nail, which is due in the next yeat. Wig Creations has a past history of uncollectible accounts by age category, as follows: Fequired: 1. Determine the number of days past due for each of the preceding accounts. If an account is not past due, enter a zero. 2. Complete the aging of recelvables schedule by adding the omitted accounts to the bottom of the schedule and updating the totals. If an ampunt box does not require an entry, leave it blanki 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 $4,300 before adjustment on December 31, 20Y7. Journalize the adjustment for uncollectible accounts. If an amount box does not require an entry, leave it blank. 5. Assuming 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 5 In addition, the stockholders' equity (retained earnings) would be by 5 because bad debt expense would be and net income by $ on the income statement
