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Trophy Fish Company supplies flies and fishing gear to sporting goods stores and outfitters throughout the western United States. The accounts receivable clerk for Trophy

Trophy Fish Company supplies flies and fishing gear to sporting goods stores and outfitters throughout the western United States. The accounts receivable clerk for Trophy Fish prepared the following partially completed aging of receivables schedule as of the end of business on December 31, 20Y6:

1

Not

Days Past Due

Days Past Due

Days Past Due

Days Past Due

Days Past Due

2

Past

3

Customer

Balance

Due

1-30

31-60

61-90

91-120

Over 120

4

AAA Outfitters

20,600.00

20,600.00

5

Brown Trout Fly Shop

7,200.00

7,200.00

6

~~~~~

~~~~~

~~~~~

~~~~~

~~~~~

~~~~~

~~~~~

~~~~~

7

8

Zigs Fish Adventures

4,200.00

4,200.00

9

Subtotals

1,301,200.00

751,700.00

287,100.00

126,100.00

37,800.00

23,500.00

75,000.00

The following accounts were unintentionally omitted from the aging schedule:

Customer

Due Date

Balance

Adams Sports & Flies May 22, 20Y6 $4,900
Blue Dun Flies Oct. 10, 20Y6 5,200
Cicada Fish Co. Sept. 29, 20Y6 8,300
Deschutes Sports Oct. 20, 20Y6 6,800
Green River Sports Nov. 7, 20Y6 3,800
Smith River Co. Nov. 28, 20Y6 2,900
Western Trout Company Dec. 7, 20Y6 7,000
Wolfe Sports Jan. 20, 20Y7 4,400

Trophy Fish has a past history of uncollectible accounts by age category, as follows:

Age Class

Percent Uncollectible

Not past due 1%
130 days past due 2
3160 days past due 8
6190 days past due 30
91120 days past due 39
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 Trophy Fish Company has a debit balance of $4,000 before adjustment on December 31, 20Y6. Journalize the adjusting entry 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?

CHART OF ACCOUNTSTrophy Fish CompanyGeneral Ledger

ASSETS
110 Cash
111 Petty Cash
121 Accounts Receivable-Adams Sports & Flies
122 Accounts Receivable-Blue Dun Flies
123 Accounts Receivable-Cicada Fish Co.
124 Accounts Receivable-Deschutes Sports
125 Accounts Receivable-Green River Sports
126 Accounts Receivable-Smith River Co.
127 Accounts Receivable-Western Trout Company
128 Accounts Receivable-Wolfe Sports
129 Allowance for Doubtful Accounts
131 Interest Receivable
132 Notes Receivable
141 Merchandise Inventory
145 Office Supplies
146 Store Supplies
151 Prepaid Insurance
181 Land
191 Store Equipment
192 Accumulated Depreciation-Store Equipment
193 Office Equipment
194 Accumulated Depreciation-Office Equipment
LIABILITIES
210 Accounts Payable
211 Salaries Payable
213 Sales Tax Payable
214 Interest Payable
215 Notes Payable
EQUITY
310 Owner, Capital
311 Owner, Drawing
312 Income Summary
REVENUE
410 Sales
610 Interest Revenue
EXPENSES
510 Cost of Merchandise Sold
520 Sales Salaries Expense
521 Advertising Expense
522 Depreciation Expense-Store Equipment
523 Delivery Expense
524 Repairs Expense
529 Selling Expenses
530 Office Salaries Expense
531 Rent Expense
532 Depreciation Expense-Office Equipment
533 Insurance Expense
534 Office Supplies Expense
535 Store Supplies Expense
536 Credit Card Expense
537 Cash Short and Over
538 Bad Debt Expense
539 Miscellaneous Expense
710 Interest Expense

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 & Flies May 22, 20Y6 days
Blue Dun Flies Oct. 10, 20Y6 days
Cicada Fish Co. Sept. 29, 20Y6 days
Deschutes Sports Oct. 20, 20Y6 days
Green River Sports Nov. 7, 20Y6 days
Smith River Co. Nov. 28, 20Y6 days
Western Trout Company Dec. 7, 20Y6 days
Wolfe Sports Jan. 20, 20Y7 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.

Aging of Receivables Schedule

December 31, 20Y6

1

Days Past Due

Days Past Due

Days Past Due

Days Past Due

Days Past Due

2

Customer

Balance

Not Past Due

1-30

31-60

61-90

91-120

Over 120

3

AAA Outfitters

20,600.00

20,600.00

4

Brown Trout Fly Shop

7,200.00

7,200.00

5

~~~~~

~~~~~

~~~~~

~~~~~

~~~~~

~~~~~

~~~~~

~~~~~

6

Zigs Fish Adventures

4,200.00

4,200.00

7

Subtotals

1,301,200.00

751,700.00

287,100.00

126,100.00

37,800.00

23,500.00

75,000.00

8

Adams Sports & Flies

9

Blue Dun Flies

10

Cicada Fish Co.

11

Deschutes Sports

12

Green River Sports

13

Smith River Co.

14

Western Trout Company

15

Wolfe Sports

16

Total

17

Percentage uncollectible

18

Estimate of uncollectible accounts

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

4. Assume that the allowance for doubtful accounts for Trophy Fish Company has a debit balance of $4,000 before adjustment on December 31, 20Y6. Journalize the adjusting entry for uncollectible accounts. Refer to the chart of accounts for a listing of the account titles the company uses.

PAGE 10

JOURNAL

ACCOUNTING EQUATION

DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY

1

2

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