December 31, 20Y1 Customer Balance Not Past Due Days Past Days Past Due 1-30 Due 31-60 Days Past Days Past Due 61-90 Due 91-120 Days Past Due Over 120 Subtotals Arcade Beauty Creative Images Excel Hair Products First Class Hair Care Golden Images Oh The Hair One Stop Hair Designs Visions Hair and Nail Total Percent uncollectible Estimate of uncollectible accounts 1% 3% 10% 15% 35% 75% 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 $1,840 before adjustment on December 31, 20Y1. Journalize the adjustment for uncollectible accounts. 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 for doubtful accounts would be account would be by by by and net income by because the allowance In addition, the owner's capital because bad debt expense would be on the income statement. Aging of Receivables; Estimating Allowance for Doubtful Accounts 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, 20Y1: Days Past Due Customer Balance Not Past Due 1-30 31-60 61-90 91-120 over 120 Subtotals 847,600 470,400 203,400 93,200 31,400 28,000 21,200 The following accounts were unintentionally omitted from the aging schedule: Customer Arcade Beauty Due Date Balance May 28, 20Y1 $3,200 eative Images Sept. 7, 20Y1 6,600 Excel Hair Products Oct. 17, 20Y1 900 First Class Hair Care Oct. 24, 20Y1 2,200 Golden Images Nov. 23, 20Y1 700 Oh The Hair Nov. 29, 20Y1 3,800 One Stop Hair Designs Dec. 2, 20Y1 2,400 Jan. 5, 20Y2 8,100 Visions Hair and Nail Wig Creations has a past history of uncollectible accounts by age category, as follows: Percent Age Class Uncollectible Not past due 1 % 1-30 days past due 3 31-60 days past due 10 61-90 days past due 15 91-120 days past due 35 Over 120 days past due 75 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. Customer Arcade Beauty Due Date Number of Days Past Due May 28, 20Y1 days Creative Images Sent 7 201 days

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
December 31, 20Y1
Customer
Balance
Not Past
Due
Days Past Days Past
Due 1-30 Due 31-60
Days Past
Days Past
Due 61-90 Due 91-120
Days Past
Due Over
120
Subtotals
Arcade Beauty
Creative Images
Excel Hair
Products
First Class Hair
Care
Golden Images
Oh The Hair
One Stop Hair
Designs
Visions Hair and
Nail
Total
Percent
uncollectible
Estimate of
uncollectible
accounts
1%
3%
10%
15%
35%
75%
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 $1,840 before
adjustment on December 31, 20Y1. Journalize the adjustment for uncollectible accounts.
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
for doubtful accounts would be
account would be
by
by
by
and net income
by
because the allowance
In addition, the owner's capital
because bad debt expense would be
on the income
statement.
Transcribed Image Text:December 31, 20Y1 Customer Balance Not Past Due Days Past Days Past Due 1-30 Due 31-60 Days Past Days Past Due 61-90 Due 91-120 Days Past Due Over 120 Subtotals Arcade Beauty Creative Images Excel Hair Products First Class Hair Care Golden Images Oh The Hair One Stop Hair Designs Visions Hair and Nail Total Percent uncollectible Estimate of uncollectible accounts 1% 3% 10% 15% 35% 75% 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 $1,840 before adjustment on December 31, 20Y1. Journalize the adjustment for uncollectible accounts. 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 for doubtful accounts would be account would be by by by and net income by because the allowance In addition, the owner's capital because bad debt expense would be on the income statement.
Aging of Receivables; Estimating Allowance for Doubtful Accounts
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, 20Y1:
Days Past Due
Customer Balance
Not Past Due 1-30
31-60
61-90
91-120
over 120
Subtotals
847,600
470,400
203,400
93,200
31,400
28,000
21,200
The following accounts were unintentionally omitted from the aging schedule:
Customer
Arcade Beauty
Due Date
Balance
May 28, 20Y1
$3,200
eative Images
Sept. 7, 20Y1
6,600
Excel Hair Products
Oct. 17, 20Y1
900
First Class Hair Care
Oct. 24, 20Y1
2,200
Golden Images
Nov. 23, 20Y1
700
Oh The Hair
Nov. 29, 20Y1
3,800
One Stop Hair Designs
Dec. 2, 20Y1
2,400
Jan. 5, 20Y2
8,100
Visions Hair and Nail
Wig Creations has a past history of uncollectible accounts by age category, as follows:
Percent
Age Class
Uncollectible
Not past due
1 %
1-30 days past due
3
31-60 days past due
10
61-90 days past due
15
91-120 days past due
35
Over 120 days past due
75
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.
Customer
Arcade Beauty
Due Date
Number of Days Past Due
May 28, 20Y1
days
Creative Images
Sent 7 201
days
Transcribed Image Text:Aging of Receivables; Estimating Allowance for Doubtful Accounts 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, 20Y1: Days Past Due Customer Balance Not Past Due 1-30 31-60 61-90 91-120 over 120 Subtotals 847,600 470,400 203,400 93,200 31,400 28,000 21,200 The following accounts were unintentionally omitted from the aging schedule: Customer Arcade Beauty Due Date Balance May 28, 20Y1 $3,200 eative Images Sept. 7, 20Y1 6,600 Excel Hair Products Oct. 17, 20Y1 900 First Class Hair Care Oct. 24, 20Y1 2,200 Golden Images Nov. 23, 20Y1 700 Oh The Hair Nov. 29, 20Y1 3,800 One Stop Hair Designs Dec. 2, 20Y1 2,400 Jan. 5, 20Y2 8,100 Visions Hair and Nail Wig Creations has a past history of uncollectible accounts by age category, as follows: Percent Age Class Uncollectible Not past due 1 % 1-30 days past due 3 31-60 days past due 10 61-90 days past due 15 91-120 days past due 35 Over 120 days past due 75 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. Customer Arcade Beauty Due Date Number of Days Past Due May 28, 20Y1 days Creative Images Sent 7 201 days
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