Aging of Receivables; Estimating Allowance for Doubtful AccountsWig 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 followingpartially completed aging of receivables schedule as of the end of business on December 31, 20Y7:NotDays Past DuePastCustomerBalanceDue1-3031-6061-9091-120Over 120АВС Веauty20,80020,800Angel Wigs7,3007,300Zodiac Beauty4,3004,300Subtotals1,309,300748,300289,200125,20043,10019,50084,000The following accounts were unintentionally omitted from the aging schedule. Assume all due dates are for the current year except for Visions Hair & Nail, which is due in the next year.CustomerDue DateBalanceArcade BeautyAug. 17$5,000Creative ImagesOct. 304,700Excel Hair ProductsJuly 38,500First Class Hair CareSept. 86,900Golden ImagesNov. 233,400Oh That HairNov. 292,900One Stop Hair DesignsDec. 77,100Visions Hair & NailJan. 114,200Wig Creations has a past history of uncollectible accounts by age category, as follows:PercentAge ClassUncollectibleNot past due1 %1-30 days past due231-60 days past due961-90 days past due2891-120 days past due41Over 120 days past due76 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.CustomerDue DateNumber of Days Past DueArcade BeautyAug. 17daysCreative ImagesOct. 30daysExcel Hair ProductsJuly 3daysFirst Class Hair CareSept. 8daysGolden ImagesNov. 23daysOh That HairNov. 29daysOne Stop Hair DesignsDec. 7daysVisions Hair & NailJan. 11days2. 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.Wig Creations CompanyAging of Receivables ScheduleDecember 31, 20Y7Days PastDue Over 120Not PastDays Past Days PastDays PastDays PastBalanceDueDue 1-30Due 31-60 Due 61-90 Due 91-120CustomerABC Beauty20,80020,800Angel Wigs7,3007,300Zodiac Beauty4,3004,300Subtotals1,309,300 748,300289,200125,20043,10019,50084,000Arcade BeautyCreative ImagesExcel Hair ProductsFirst Class Hair CareGolden ImagesOh That HairOne Stop Hair DesignsVisions Hair & NailTotalsPercent uncollectible (%)%%%%%$$Estimate of uncollectible accounts3. 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 $4,900 before adjustment on December 31, 20Y7. Journalize the adjustment for uncollectibleaccounts. If an amount box does not require an entry, leave it blank.Dec. 315. 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-by $because the allowance for doubtful accounts would beby $In addition, thestockholders' equity (retained earnings) would be-by $because bad debt expense would beand net income- byon the income statement.

Allowance for doubtful accounts is a contra asset account .

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, 20Y7: Not Days Past Due Past Customer Balance Due 1-30 31-60 61-90 91-120 Over 120 АВС Веauty 20,800 20,800 Angel Wigs 7,300 7,300 Zodiac Beauty 4,300 4,300 Subtotals 1,309,300 748,300 289,200 125,200 43,100 19,500 84,000 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 is due in the next year. Customer Due Date Balance Arcade Beauty Aug. 17 $5,000 Creative Images Oct. 30 4,700 Excel Hair Products July 3 8,500 First Class Hair Care Sept. 8 6,900 Golden Images Nov. 23 3,400 Oh That Hair Nov. 29 2,900 One Stop Hair Designs Dec. 7 7,100 Visions Hair & Nail Jan. 11 4,200 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 2 31-60 days past due 9 61-90 days past due 28 91-120 days past due 41 Over 120 days past due 76

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, 20Y7: Not Days Past Due Past Customer Balance Due 1-30 31-60 61-90 91-120 Over 120 АВС Веauty 20,800 20,800 Angel Wigs 7,300 7,300 Zodiac Beauty 4,300 4,300 Subtotals 1,309,300 748,300 289,200 125,200 43,100 19,500 84,000 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 is due in the next year. Customer Due Date Balance Arcade Beauty Aug. 17 $5,000 Creative Images Oct. 30 4,700 Excel Hair Products July 3 8,500 First Class Hair Care Sept. 8 6,900 Golden Images Nov. 23 3,400 Oh That Hair Nov. 29 2,900 One Stop Hair Designs Dec. 7 7,100 Visions Hair & Nail Jan. 11 4,200 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 2 31-60 days past due 9 61-90 days past due 28 91-120 days past due 41 Over 120 days past due 76

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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Write off and Recovery Entries Prepare the appropriate journal entries for the following transactions for Warren Co. a. On February 1, the company determined that $6,800 in customer accounts is uncollectible; specifically, $900 for DeadBeat Co. and $5,900 for NoPay Co. Prepare the journal entry to write off those accounts. b. On June 5, the company unexpectedly received a $900 payment on a customer account, Dead Beat Company, that had previously been written off in part a. Prepare the entries necessary to reinstate the account and to record the cash received.
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 835,600 463,800 200,500 91,900 30,900 27,600 20,900 The following accounts were unintentionally omitted from the aging schedule: Customer Due Date Balance Arcade Beauty May 28, 20Y1 $2,700 Creative Images Sept. 7, 20Y1 5,600 Excel Hair Products Oct. 17, 20Y1 700 First Class Hair Care Oct. 24, 20Y1 1,800 Golden Images Nov. 23, 20Y1 600 Oh The Hair Nov. 29, 20Y1 3,200 One Stop Hair Designs Dec. 2, 20Y1 2,000 Visions Hair and Nail Jan. 5, 20Y2 6,800 Wig Creations has a past history of…
Pina Stores accepts both its own and national credit cards. During the year, the following selected summary transactions occurred. Jan. 15 20 Feb. 10 15 Journalize the transactions for Pina Stores. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Date Jan. 15 Jan. 20 Feb. 10 Made Pina credit card sales totaling NT$35,500. (There were no balances prior to January 15.) Made Visa credit card sales (service charge fee 3%) totaling NT$6,300. Collected NT$12,100 on Pina credit card sales. Added finance charges of 2.5% to Pina credit card account balances. Feb. 15 Accounts Receivable Account Titles and Explanation Sales Revenue Cash Cash Accounts Receivable Accounts Receivable Debit 35500 6111 189 12100 585 Credit 35500 6300 12100 585
Aging of Receivables Schedule The accounts receivable clerk for Kirchhoff Industries prepared the following partially completed aging of receivables schedule as of the end of business on November 30: Not Days Past Due Past Over Customer Balance Due 1-30 31-60 61-90 90 Academy Industries Inc. 5,500 5,500 Ascent Company 3,100 3,100 Zoot Company 7,700 7,700 Subtotals 886,200 535,200 195,000 85,100 44,300 26,600 The following accounts were unintentionally omitted from the aging schedule and not included in the subtotals above: Customer Balance Due Date Conover Industries $12,400 July 9 Keystone Company 8,900 September 19 Moxie Creek Inc. 17,700 October 17 Rainbow Company 10,600 November 5 Swanson Company 23,900 December 21 Question Content Area a. Determine the number of days past due for each of the preceding accounts as of November 30. If an…
Complete a,b,&c please and thank you
Outlaw Bike Co. is a wholesaler of motorcycle supplies. An aging of the company's accounts receivable on December 31, and a historical analysis of the percentage of uncollectible accounts in each age category are as follows: Age Class Not past due 1-30 days past due 31-60 days past due 61-90 days past due 91-180 days past due Over 180 days past due Balance Age Class Not past due 1-30 days past due 31-60 days past due 61-90 days past due 91-180 days past due Over 180 days past due Total $892,000 98,100 44,600 32,100 23,200 16,900 $1,106,900 Balance $892,000 98,100 44,600 32,100 23,200 16,900 $1,106,900 Estimate what the proper balance of the allowance for doubtful accounts should be as of December 31. Percent Uncollectible 4 6 18 1/2 % 4 Percent Uncollectible 1/2% 42 6 80 18 42 80 Estimated Uncollectible Accounts Amount
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Required information Use the following information for the Exercises below. Skip to question [The following information applies to the questions displayed below.]Daley Company prepared the following aging of receivables analysis at December 31. Days Past Due Total 0 1 to 30 31 to 60 61 to 90 Over 90 Accounts receivable $ 625,000 $ 407,000 $ 101,000 $ 47,000 $ 29,000 $ 41,000 Percent uncollectible 3 % 4 % 7 % 9 % 12 % Exercise 9-9 Percent of receivables method LO P3 a. Estimate the balance of the Allowance for Doubtful Accounts assuming the company uses 5% of total accounts receivable to estimate uncollectibles, instead of the aging of receivables method.b. Prepare the adjusting entry to record Bad Debts Expense using the estimate from part a. Assume the unadjusted balance in the Allowance for Doubtful Accounts is a $13,100 credit.c. Prepare the adjusting entry to record bad debts expense…
Entries for Uncollectible Accounts, using Direct Write-Off Method Journalize the following transactions in the accounts of Arrow Medical Co., a medical equipment company that uses the direct write-off method of accounting for uncollectible receivables: Jan. 19. Sold merchandise on account to Dr. Sinclair Welby, $37,600. The cost of the merchandise sold was $20,300. July 7. Received $8,600 from Dr. Sinclair Welby and wrote off the remainder owed on the sale of January 19 as uncollectible. Nov. 2. Reinstated the account of Dr. Sinclair Welby that had been written off on July 7 and received $29,000 cash in full payment. If an amount box does not require an entry, leave it blank.
AB Co made a credit sale to DE Co for $200,000 on July 19x9. It is known that at the end of 19x9 there was an outstanding receivable of $47,000. Managementestimates that $25,000 will be uncollectible.In July 19x9 the collections department stated that a receivable of $5,000 was written off frombookkeeping because it is impossible to receive payment from DE Co. Unexpectedly monthOctober 19x9 DE Co pays its outstanding debt. Requested:Prepare the adjusting entries and the journals needed to record the above transactions properlythe backup method as well as the direct deletion method!
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