Question
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 |
|
|
|
|
|
|
|
|
Step by Step Solution
There are 3 Steps involved in it
Step: 1
The given question appears to be complete Lets proceed with the required calculations and details Step 1 Determine the number of days past due for eac...Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started