Trophy Fish Company supplies flies and fishing gear products 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, 20Y7: Not Days Past Due Past Customer Balance Due 1-30 31-60 61-90 91-120 Over 120 AAA Outfitters 20,700 20,700 Brown Trout Fly Shop 7,000 7,000 Zigs Fish Adventures 4,500 4,500 Subtotals 1,301,800 758,900 289,600 111,900 40,000 22,000 79,400 The following accounts were unintentionally omitted from the aging schedule: Customer Due Date Balance Adams Sports and Flies May 22 $4,600 Blue Dun Flies Oct. 10 5,300 Cicada Fish Co. Sept. 29 8,700 Deschutes Sports Oct. 20 7,200 Green River Sports Nov. 7 3,900 Smith River Co. Nov. 28 2,000 Western Trout Company Dec. 7 6,400 Wolfe Sports Jan. 20 4,100 Trophy Fish 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 12 61-90 days past due 29 91-120 days past due 42 Over 120 days past due 85 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 Due Date Number of Days Past Due Adams Sports and Flies May 22 Blue Dun Flies Oct. 10 Cicada Fish Co. Sept. 29 Deschutes Sports Oct. 20 Green River Sports Nov. 7 Smith River Co. Nov. 28 Western Trout Company Dec. 7 Wolfe Sports Jan. 20 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. Trophy Fish Company Aging of Receivables Schedule December 31, 20Y7 Customer Balance Not Past Due Days Past Due 1-30 Days Past Due 31-60 Days Past Due 61-90 Days Past Due 91-120 Days Past Due Over 120 AAA Outfitters 20,700 20,700 Brown Trout Fly Shop 7,000 7,000 Zigs Fish Adventures 4500 4500 Subtotals 1,301,800 758,900 289,600 111,900 40,000 22,000 79,400 Adams Sports and Flies Blue Dun Flies Green River Sports Smith River Co. Wolfe Sports Totals Percent uncollectible (%) Estimate of uncollectible accounts 3. Estimate the allowance for doubtful accounts, based on the aging of receivables schedule.
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Trophy Fish Company supplies flies and fishing gear products to sporting goods stores and outfitters throughout the western United States. The
| Not | Days Past Due | |||||||||||||
| Past | ||||||||||||||
| Customer | Balance | Due | 1-30 | 31-60 | 61-90 | 91-120 | Over 120 | |||||||
| AAA Outfitters | 20,700 | 20,700 | ||||||||||||
| Brown Trout Fly Shop | 7,000 | 7,000 | ||||||||||||
| Zigs Fish Adventures | 4,500 | 4,500 | ||||||||||||
| Subtotals | 1,301,800 | 758,900 | 289,600 | 111,900 | 40,000 | 22,000 | 79,400 |
The following accounts were unintentionally omitted from the aging schedule:
| Customer | Due Date | Balance | ||
|---|---|---|---|---|
| Adams Sports and Flies | May 22 | $4,600 | ||
| Blue Dun Flies | Oct. 10 | 5,300 | ||
| Cicada Fish Co. | Sept. 29 | 8,700 | ||
| Deschutes Sports | Oct. 20 | 7,200 | ||
| Green River Sports | Nov. 7 | 3,900 | ||
| Smith River Co. | Nov. 28 | 2,000 | ||
| Western Trout Company | Dec. 7 | 6,400 | ||
| Wolfe Sports | Jan. 20 | 4,100 |
Trophy Fish 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 | 12 | |
| 61-90 days past due | 29 | |
| 91-120 days past due | 42 | |
| Over 120 days past due | 85 |
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 | Due Date | Number of Days Past Due |
| Adams Sports and Flies | May 22 | |
| Blue Dun Flies | Oct. 10 | |
| Cicada Fish Co. | Sept. 29 | |
| Deschutes Sports | Oct. 20 | |
| Green River Sports | Nov. 7 | |
| Smith River Co. | Nov. 28 | |
| Western Trout Company | Dec. 7 | |
| Wolfe Sports | Jan. 20 |
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.
| Trophy Fish Company | |||||||
| Aging of Receivables Schedule | |||||||
| December 31, 20Y7 | |||||||
| Customer | Balance | Not Past Due | Days Past Due 1-30 | Days Past Due 31-60 | Days Past Due 61-90 | Days Past Due 91-120 | Days Past Due Over 120 |
| AAA Outfitters | 20,700 | 20,700 | |||||
| Brown Trout Fly Shop | 7,000 | 7,000 | |||||
| Zigs Fish Adventures | 4500 | 4500 | |||||
| Subtotals | 1,301,800 | 758,900 | 289,600 | 111,900 | 40,000 | 22,000 | 79,400 |
| Adams Sports and Flies | |||||||
| Blue Dun Flies | |||||||
| Green River Sports | |||||||
| Smith River Co. | |||||||
| Wolfe Sports | |||||||
| Totals | |||||||
| Percent uncollectible (%) | |||||||
| 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 has a credit balance of $3,600 before adjustment on December 31, 20Y7. Journalize the adjustment for uncollectible accounts.
| Dec. 31 | |||
5. Assume that the
On the balance sheet, assets would be by ___ because the allowance for doubtful accounts would be by __. In addition, the
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