Vanity Wigs Company supplies wigs and hair care products to beauty salons throughout California and the Pacific Northwest. The accounts receivable clerk for Vanity Wigs prepared the following partially completed aging-of-receivables schedule as of the end of business on December 31, 2006:

The following accounts were unintentionally omitted from the aging schedule.

Vanity Wigs has a past history of uncollectible accounts by age category, as follows:
Percentage
Age Class Uncollectible
Not past due ........... 1%
1–30 days past due ......... 4
31–60 days past due ....... 6
61–90 days past due .......15
91–120 days past due ........30
Over 120 days past due ......70
Instructions
1. Determine the number of days past due for each of the preceding accounts.
2. Complete the aging-of-receivables schedule.
3. Estimate the allowance for doubtful accounts, based on the aging-of-receivables schedule.
4. Assume that the allowance for doubtful accounts for Vanity Wigs has a credit balance of $8,350 before adjustment on December 31, 2006. Journalize the adjusting entry for uncollectibleaccounts.

Transcribed Image Text:

Days Past Due Not Past Customer BalanceDue 1-30 31-60 61-90 91-120 Over 120 Adams Beauty 8,000 8,000 Barkell Wigs 7,500 7,500 Zimmer's Beauty 2,900 Subtotals 2,900 880,000 498,600 197,25088,75043,300 29,950 22,150 Customer Due Date Balance Allison's Uniquely Yours Western Designs Treat's Nicole's Beauty Store Ginburg Supreme Jeremy's Hair Products Hairy's Hair Care Southern Images Lopez's Blond Bombs Josset Ritz Cool Designs Buttram Images July 6, 2006 Aug. 10, 2006 Sept. 6, 2006 Sept. 29, 2006 Oct. 10, 2006 Oct. 20, 2006 Oct. 31, 2006 Nov. 18, 2006 Nov. 23, 2006 Nov. 30, 2006 Dec. 4, 2006 Jan. 3, 2007 1,000 2,500 1,800 4,000 1,500 2,000 1,200 1,800 3,500 1,000 5,200