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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, 2015:

1	A	B	C	D	E	F	G	H
2				Days Past Due	Days Past Due	Days Past Due	Days Past Due	Days Past Due
3	Customer	Balance	Not Past Due	1-30	31-60	61-90	91-120	Over 120
4	ABC Beauty	15,000.00	15,000.00
5	Angel Wigs	8,000.00			8,000.00
6	~~~~~	~~~~~	~~~~~	~~~~~	~~~~~	~~~~~	~~~~~	~~~~~
7	Zodiac Beauty	3,000.00		3,000.00
8	Subtotals	875,000.00	415,000.00	210,000.00	112,000.00	55,000.00	18,000.00	65,000.00

The following accounts were unintentionally omitted from the aging schedule:

Customer	Due Date	Balance
Arcade Beauty	Aug. 17, 2015	$10,000
Creative Images	Oct. 30, 2015	8,500
Excel Hair Products	July 3, 2015	7,500
First Class Hair Care	Sept. 8, 2015	6,600
Golden Images	Nov. 23, 2015	3,600
Oh That Hair	Nov. 29, 2015	1,400
One Stop Hair Designs	Dec. 7, 2015	4,000
Visions Hair & Nail	Jan. 11, 2016	9,000

Wig Creations has a past history of uncollectible accounts by age category, as follows:

Age Class	Percent Uncollectible
Not past due	1%
130 days past due	4%
3160 days past due	16%
6190 days past due	25%
91120 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.
2.	Complete the aging of receivables schedule by adding the omitted accounts to the bottom of the schedule and updating the totals.
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, 2015. Journalize the adjustment for uncollectible accounts. Refer to the chart of accounts for a listing of the account titles the company uses.
5.	Assume that the adjusting entry in (4) was inadvertently omitted, how would the omission affect the balance sheet and income statement?

Starting Question

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1. Determine the number of days past due for each of the following accounts. If an account is not past due, enter a zero.

Customer	Due Date	Number of Days Past Due
Arcade Beauty	Aug. 17, 2015	days
Creative Images	Oct. 30, 2015	days
Excel Hair Products	July 3, 2015	days
First Class Hair Care	Sept. 8, 2015	days
Golden Images	Nov. 23, 2015	days
Oh That Hair	Nov. 29, 2015	days
One Stop Hair Designs	Dec. 7, 2015	days
Visions Hair & Nail	Jan. 11, 2016	days

Points:

7 / 8

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Count the number of days after the due date up to December 31. Do not include the due date in your count. Remember that not all months have an equal number of days.

Additional Question

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3. Estimate the allowance for doubtful accounts, based on the aging of receivables schedule.

$

Points:

0 / 1

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Journal

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4. Assume that the allowance for doubtful accounts for Wig Creations has a credit balance of $7,375 before adjustment on December 31, 2015. Journalize the adjustment for uncollectible accounts. Refer to the chart of accounts for a listing of the account titles the company uses.

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JOURNAL

Score: 0/25

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
1
2

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0 / 5

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