Accounting (Text Only)
26th Edition
ISBN: 9781285743615
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Chapter 9, Problem 9.2BPR
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
The following accounts were unintentionally omitted from the aging schedule:
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 | 4 |
| 31-60 days past due | 16 |
| 61-90 days past due | 25 |
| 91-120 days past due | 40 |
| Over 120 days past due | 80 |
Instructions
- 1. Determine the number of days past due for each of the preceding accounts.
- 2. Complete the aging of receivables schedule by adding the omitted accounts to the bottom of the schedule and updating the totals.
- 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 $7,375 before adjustment on December 31, 2015. Journalize the adjustment for uncollectible accounts.
- 5. Assume that the
adjusting entry in (4) was inadvertently omitted, how would the omission affect thebalance sheet and income statement?
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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, 20Y7:
Not
Days Past Due
Past
Customer
Balance
Due
1-30
31-60
61-90
91-120
Over 120
ABC Beauty
19,100
19,100
Angel Wigs
7,700
7,700
Zodiac Beauty
4,500
4,500
Subtotals
1,294,300
742,000
297,300
121,100
42,400
16,100
75,400
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
$5,300
Creative Images
Oct. 30
5,200
Excel Hair Products…
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
646,600
358,900
155,200
71,100
23,900
21,300
16,200
The following accounts were unintentionally omitted from the aging schedule:
Customer
Due Date
Balance
Arcade Beauty
May 28, 20Y1
$3,000
Creative Images
Sept. 7, 20Y1
6,200
Excel Hair Products
Oct. 17, 20Y1
800
First Class Hair Care
Oct. 24, 20Y1
2,100
Golden Images
Nov. 23, 20Y1
700
Oh The Hair
Nov. 29, 20Y1
3,600
One Stop Hair Designs
Dec. 2, 20Y1
2,300
Visions Hair and Nail
Jan. 5, 20Y2
7,600
Wig Creations has a past history of…
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
577,500
320,500
138,600
63,500
21,400
19,100
14,400
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
5,700
Excel Hair Products
Oct. 17, 20Y1
800
First Class Hair Care
Oct. 24, 20Y1
1,900
Golden Images
Nov. 23, 20Y1
600
Oh That Hair
Nov. 29, 20Y1
3,200
One Stop Hair Designs
Dec. 2, 20Y1
2,100
Visions Hair & Nail
Jan. 5, 20Y2
6,900
Wig Creations has a past history of…
Chapter 9 Solutions
Accounting (Text Only)
Ch. 9 - What are the three classifications of receivables?Ch. 9 - Dans Hardware is a small hardware store in the...Ch. 9 - What kind of an account (asset, liability, etc.)...Ch. 9 - After the accounts are adjusted and closed at the...Ch. 9 - A firm has consistently adjusted its allowance...Ch. 9 - Which of the two methods of estimating...Ch. 9 - Neptune Company issued a note receivable to...Ch. 9 - If a note provides for payment of principal of...Ch. 9 - The maker of a 240,000, 6%, 90-day note receivable...Ch. 9 - The note receivable dishonored in Discussion...
Ch. 9 - Prob. 9.1APECh. 9 - Direct write-off method Journalize the following...Ch. 9 - Allowance method Journalize the following...Ch. 9 - Allowance method Journalize the following...Ch. 9 - Percent of sales method At the end of the current...Ch. 9 - Percent of sales method At the end of the current...Ch. 9 - Analysis of receivables method At the end of the...Ch. 9 - Analysis of receivables method At the end of the...Ch. 9 - Note receivable Guzman Company received a 60-day,...Ch. 9 - Note receivable Prefix Supply Company received a...Ch. 9 - Prob. 9.6APECh. 9 - Prob. 9.6BPECh. 9 - Prob. 9.1EXCh. 9 - Nature of uncollectible accounts MGM Resorts...Ch. 9 - Entries for uncollectible accounts, using direct...Ch. 9 - Entries for uncollectible receivables, using...Ch. 9 - Entries to write off accounts receivable Creative...Ch. 9 - Providing for doubtful accounts At the end of the...Ch. 9 - Number of days past due Toot Auto Supply...Ch. 9 - Aging of receivables schedule The accounts...Ch. 9 - Estimating allowance for doubtful accounts Waddell...Ch. 9 - Adjustment for uncollectible accounts Using data...Ch. 9 - Estimating doubtful accounts Selbys Bike Co. is a...Ch. 9 - Entry for uncollectible accounts Using the data in...Ch. 9 - Entries for bad debt expense under the direct...Ch. 9 - Entries for bad debt expense under the direct...Ch. 9 - Effect of doubtful accounts on net income During...Ch. 9 - Effect of doubtful accounts on net income Using...Ch. 9 - Entries for bad debt expense under the direct...Ch. 9 - Entries for bad debt expense under the direct...Ch. 9 - Determine due date and interest on notes Determine...Ch. 9 - Entries for notes receivable Master Designs...Ch. 9 - Entries for notes receivable The series of seven...Ch. 9 - Entries for notes receivable, including year-end...Ch. 9 - Entries for receipt and dishonor of note...Ch. 9 - Entries for receipt and dishonor of notes...Ch. 9 - Prob. 9.25EXCh. 9 - Accounts receivable turnover and days sales in...Ch. 9 - Prob. 9.27EXCh. 9 - Prob. 9.28EXCh. 9 - Prob. 9.29EXCh. 9 - Entries related to uncollectible accounts The...Ch. 9 - Aging of receivables; estimating allowance for...Ch. 9 - Compare two methods of accounting for...Ch. 9 - Details of notes receivable and related entries...Ch. 9 - Notes receivable entries The following data relate...Ch. 9 - Sales and notes receivable transactions The...Ch. 9 - Entries related to uncollectible accounts The...Ch. 9 - Aging of receivables; estimating allowance for...Ch. 9 - Compare two methods of accounting for...Ch. 9 - Details of notes receivable and related entries...Ch. 9 - Notes receivable entries The following data relate...Ch. 9 - Sales and notes receivable transactions The...Ch. 9 - Prob. 9.1CPCh. 9 - Estimate uncollectible accounts For several years,...Ch. 9 - Prob. 9.3CPCh. 9 - Prob. 9.4CPCh. 9 - Accounts receivable turnover and days sales in...
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- 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: The following accounts were unintentionally omitted from the aging schedule: Wig Creations has a past history of uncollectible accounts by age category, as follows: Instructions 1. Determine the number of days past due for each of the preceding accounts. 2. Complete the aging of receivables schedule by adding the omitted accounts to the bottom of the schedule and updating the totals. 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 7,375 before adjustment on December 31, 20Y1. Journalize the adjustment for uncollectible accounts. 5. Assuming that the adjusting entry in (4) was inadvertently omitted, how would the omission affect the balance sheet and income statement?arrow_forwardAging 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, 20Y7: 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. Wig Creations has a past history of uncollectible accounts by age category, as follows: Instructions 1. Determine the number of days past due for each of the preceding accounts. 2. Complete the aging of receivables schedule by adding the omitted accounts to the bottom of the schedule and updating the totals. 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 7,375 before adjustment on December 31. 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?arrow_forwardWaddell Industries has a past history of uncollectible accounts, as follows. Estimate the allowance for doubtful accounts, based on the aging of receivables schedule you completed in Exercise 9-8. The accounts receivable clerk for Waddell Industries prepared the following partially completed aging of receivables schedule as of the end of business on August 31: The following accounts were unintentionally omitted from the aging schedule and not included in the preceding subtotals: a. Determine the number of days past due for each of the preceding accounts as of August 31. b. Complete the aging of receivables schedule by adding the omitted accounts to the bottom of the schedule and updating the totals.arrow_forward
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