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, 2017: Days Past Due Not Past Due 1-30 31-60 61-90 91-120 Over 120 Customer ABC Beauty Angel Wigs Balance 20,200 7,000 20,200 7,000 Zodiac Beauty 3,900 3,900 Subtotals 1,297,000 743,900 284,900 129,500 41,400 17,600 79,700 The following accounts were unintentionally omitted from the aging schedule. Assume all due dates are for the current year except for Visions Hair & Nail, which due in the next year. Customer Due Date Balance Arcade Beauty Aug. 17 $4,800 Creative Images Oct. 30 4,400 Excel Hair Products July 3 8,600 First Class Hair Care Sept. 8 6,600 Golden Images Nov. 23 3,200 Oh That Hair Nov. 29 2,100 One Stop Hair Designs Dec. 7 6,800 Visions Hair & Nail Jan. 11 4,400 Wig Creations has a past history of uncollectible accounts by age category, as follows: Age Class Percent Uncollectible Not past due 1 % 1-30 days past due 2 31-60 days past due 9 61-90 days past due 28 91-120 days past due 42 Over 120 days past due 82 Required: 1. Determine the number of days past due for each of the preceding accounts. If an account is not past due, entera Zero, Customer Due Date Number of Days Past Due Arcade Beauty Aug. 12 days Creative Images Oct. 30 days Excel Hair Products Quy 1012/2009 CNOWI days First Class Hair Care Sept. 8 days Golden Images Nov. 23 days Oh That Hair Nov. 29 days One Stop Hair Designs Dec. 7 days Visions Hair & Nail Jan. 11 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, have a blank Wig Creations Company Aging of Receivables Schedule December 31, 2017 Days Days Not Days Past Past Past Days Past Days Past Balance De 91- Customer Due 1-30 Due 31. Due Over Due 61. Due 120 60 90 20,200 ABC Beauty 20,200 Angel Wigs 7.000 7,000 Zodiac Beauty 3.900 3,900 743,900 284,900 129,500 Subtotals 1,297,000 17,600 9,700 Past Arcade Beauty Great Images Excel Hair Products Golden Image On That One Stop Harun 10/12/2020 CapeNOWV21 Online teaching and loaming resource from Cenggelam % % 182 Estimate of uncollectible accounts lm | 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 $4,800 before adjustment on December 31, 2017. Joumalize the adjustment for uncollectible accounts. If an amount box does not require an entry, leave it blank. Dec. 31 by s 5. Assume 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 because the allowance for doubtful accounts would be by $ In addition, the stockholders' equity (retained earnings) would be by s because bad debt expense would be and net income by s on the income statement
