Natural Hair Company supplies wigs and hair care products to beauty salons throughout Texas and the Southwest. The accounts receivable clerk for Natural Hair prepared the following aging of receivables schedule as of the end of business on December 31, 2007.

Natural Hair Company has a past history of uncollectible accounts by age category, as shown below

Age Class		Balance		Percent
				Uncollectible
Not past due		$575,000		1%		$5,750
1-30 days past due		$140,500		2%		$2,810
31-60 days past due		$82,700		8%		$6,616
61-90 days past due		$36,000		15%		$5,400
91-120 days past due		$25,000		35%		$8,750
Over 120 day past due		$20,800		80%		$16,640
Total		$880,000
Estimate the allowance for doubtful accounts, based on the aging-fo-receivables schedule.
$45,966
Assume that the allowance for doubtful accounts for Natural Hair Company has a negative balance
of -$ 3,500 (credit ) before adjustment on December 31, 2007. Illustrate the effect on the accounts
and financial statements of the adjustment for uncollectible accounts.						$42,466
Natural Hair company reported credit sales of $ 5,000,000 during 2007. Assume that instead of using
the analysis of receivables method of estimating uncollectible accounts, Wigs Plus company uses
the percent of sales method and estimates that 1.25% of sales will be uncollectible. Illustrat the
effect on the accounts and financial statements of the adjustment for uncollectible accounts
using the percent of sales method				$ 62,500
Assume that on March 4, 2008, Natural Hair wrote off a $ 4,350 acount on Top Dog Images as
uncollectible. Illustrate the effect on the accounts and financial statements of the write-off
of the Top Dog Images Account.
Assume that on Augsut 17, 2008 Top Dog Images paid $ 4,350 on its account. Illustrate the
effect on the accounts and financial statements of reinstating and collecting
the Top Dog Images account.
Assume that instead of using the allowance method, Natural Hair uses the direct write-off
method. Illustrate the effect on the accounts and financial statements of the following:
a) The write-off of the Top Dog Images account on March 4, 2008.
b) The reinstatement and collection of the Top Dog Images account on Augsut 17, 2008.