Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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, 20Y4:

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

20,200.00

20,200.00

5

Brown Trout Fly Shop

8,000.00

8,000.00

6

~~~~~

~~~~~

~~~~~

~~~~~

~~~~~

~~~~~

~~~~~

~~~~~

7

8

Zigs Fish Adventures

4,100.00

4,100.00

9

Subtotals

1,304,500.00

748,300.00

297,300.00

117,000.00

38,700.00

23,800.00

79,400.00

The following accounts were unintentionally omitted from the aging schedule. Assume all due dates are for the current year except for Wolfe Sports, which is due in the next year.

Customer

Due Date

Balance

Adams Sports & Flies May 22 $4,900
Blue Dun Flies Oct. 10 5,200
Cicada Fish Co. Sept. 29 8,900
Deschutes Sports Oct. 20 6,600
Green River Sports Nov. 7 3,800
Smith River Co. Nov. 28 2,000
Western Trout Company Dec. 7 6,400
Wolfe Sports Jan. 20 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 3
3160 days past due 10
6190 days past due 29
91120 days past due 41
Over 120 days past due 79
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 $4,700 before adjustment on December 31. Journalize the adjusting entry for uncollectible accounts.
5. Assuming that the adjusting entry in (4) was inadvertently omitted, how would the omission affect the balance sheet and income statement?

Starting Question

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

Customer Due Date Number of Days Past Due
Adams Sports & Flies May 22, 20Y4 days
Blue Dun Flies Oct. 10, 20Y4 days
Cicada Fish Co. Sept. 29, 20Y4 days
Deschutes Sports Oct. 20, 20Y4 days
Green River Sports Nov. 7, 20Y4 days
Smith River Co. Nov. 28, 20Y4 days
Western Trout Company Dec. 7, 20Y4 days
Wolfe Sports Jan. 20, 20Y5 days

Aging of Receivables Schedule

2. Complete the aging of receivables schedule by adding the omitted accounts to the bottom of the schedule and updating the totals.

Additional Instruction

Aging of Receivables Schedule

December 31, 20Y4

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

20,200.00

20,200.00

4

Brown Trout Fly Shop

8,000.00

8,000.00

5

~~~~~

~~~~~

~~~~~

~~~~~

~~~~~

~~~~~

~~~~~

~~~~~

6

Zigs Fish Adventures

4,100.00

4,100.00

7

Subtotals

1,304,500.00

748,300.00

297,300.00

117,000.00

38,700.00

23,800.00

79,400.00

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

Totals

17

Percentage uncollectible

18

Estimate of uncollectible accounts

Additional Question

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

General Journal

4. Assume that the allowance for doubtful accounts for Trophy Fish Company has a debit balance of $4,700 before adjustment on December 31. Journalize the adjusting entry for uncollectible accounts.

General Journal Instructions

PAGE 10

JOURNAL

ACCOUNTING EQUATION

DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY

1

2

Final Question

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 . In addition, the stockholders equity (retained earnings) would be by because bad debt expense would be and net income by on the income statement.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting In An Economic Context

Authors: Jamie Pratt

7th Edition

0470128828, 978-0470128824

More Books

Students also viewed these Accounting questions

Question

Is there administrative support?

Answered: 1 week ago