Financial and Managerial Accounting - With CengageNow
14th Edition
ISBN: 9781337577809
Author: WARREN
Publisher: CENGAGE L
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 8, Problem 8.2BPR
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 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.
| Customer | Due Date | Balance |
| Arcade Beauty | Aug. 17 | $10,000 |
| Creative Images | Oct. 30 | 8,500 |
| Excel Hair Products | July 3 | 7,500 |
| First Class Hair Care | Sept. 8 | 6,600 |
| Golden Images | Nov. 23 | 3,600 |
| Oh That Hair | Nov. 29 | 1,400 |
| One Stop Hair Designs | Dec. 7 | 4,000 |
| Visions Hair & Nail | Jan. 11 | 9,000 |
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. 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?
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
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, 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
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 8 Solutions
Financial and Managerial Accounting - With CengageNow
Ch. 8 - What are the three classifications of receivables?Ch. 8 - Dans Hardware is a small hardware store in the...Ch. 8 - What kind of an account (asset, liability, etc.)...Ch. 8 - After the accounts are adjusted and closed at the...Ch. 8 - A firm has consistently adjusted its allowance...Ch. 8 - Which of the two methods of estimating...Ch. 8 - Neptune Company issued a note receivable to...Ch. 8 - Prob. 8DQCh. 8 - The maker of a 240,000, 6%, 90-day note receivable...Ch. 8 - The note receivable dishonored in Discussion...
Ch. 8 - Direct write-off method Journalize the following...Ch. 8 - Allowance method Journalize the following...Ch. 8 - Percent of sales method At the end of the current...Ch. 8 - Analysis of receivables method At the end of the...Ch. 8 - Note receivable Prefix Supply Company received a...Ch. 8 - Prob. 8.1EXCh. 8 - Nature of uncollectible accounts MGM Resorts...Ch. 8 - Entries for uncollectible accounts, using direct...Ch. 8 - Entries for uncollectible receivables, using...Ch. 8 - Prob. 8.5EXCh. 8 - Providing for doubtful accounts At the end of the...Ch. 8 - Number of days past due Toot Auto Supply...Ch. 8 - Aging of receivables schedule The accounts...Ch. 8 - Estimating allowance for doubtful accounts Evers...Ch. 8 - Adjustment for uncollectible accounts Using data...Ch. 8 - Estimating doubtful accounts Outlaw Bike Co. is a...Ch. 8 - Entry for uncollectible accounts Using the data in...Ch. 8 - Entries for bad debt expense under the direct...Ch. 8 - Entries for bad debt expense under the direct...Ch. 8 - Prob. 8.15EXCh. 8 - Effect of doubtful accounts on net income Using...Ch. 8 - Prob. 8.17EXCh. 8 - Entries for bad debt expense under the direct...Ch. 8 - Determine due date and interest on notes Determine...Ch. 8 - Entries for notes receivable Valley Designs Issued...Ch. 8 - Entries for notes receivable The series of five...Ch. 8 - Entries for notes receivable, including year-end...Ch. 8 - Entries for receipt and dishonor of note...Ch. 8 - Entries for receipt and dishonor of notes...Ch. 8 - Receivables on the balance sheet List any errors...Ch. 8 - Allowance method entries The following...Ch. 8 - Aging of receivables; estimating allowance for...Ch. 8 - Compare two methods of accounting for...Ch. 8 - Details of notes receivable and related entries...Ch. 8 - Notes receivable entries The following data relate...Ch. 8 - Sales and notes receivable transactions The...Ch. 8 - Allowance method entries The following...Ch. 8 - Aging of receivables; estimating allowance for...Ch. 8 - Compare two methods of accounting for...Ch. 8 - Details of notes receivable and related entries...Ch. 8 - Notes receivable entries The following data relate...Ch. 8 - Sales and notes receivable transactions The...Ch. 8 - Prob. 1ADMCh. 8 - Ralph Lauren: Accounts receivable turnover and...Ch. 8 - Prob. 3ADMCh. 8 - Ralph Lauren and L Brands: Average accounts...Ch. 8 - Prob. 8.1TIFCh. 8 - Communication On January 1, Xtreme Co. began...
Additional Business Textbook Solutions
Find more solutions based on key concepts
BE1-7 Indicate which statement you would examine to find each of the following items: income statement (IS), ba...
Financial Accounting: Tools for Business Decision Making, 8th Edition
E6-14 Using accounting vocabulary
Learning Objective 1, 2
Match the accounting terms with the corresponding d...
Horngren's Accounting (11th Edition)
Bank loan; accrued interest LO132 On October 1, Eder Fabrication borrowed 60 million and issued a nine-month, ...
INTERMEDIATE ACCOUNTING
List five asset accounts, three liability accounts, and five expense accounts included in the acquisition and p...
Auditing and Assurance Services (16th Edition)
Place the letter of the appropriate accounting cost in Column 2 in the blank next to each decision category in ...
Fundamentals Of Cost Accounting (6th Edition)
18. What is the calculation for return on assets (ROA)? Explain what ROA measures.
Horngren's Financial & Managerial Accounting, The Financial Chapters (Book & Access Card)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- 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: 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_forwardAging of receivables schedule The accounts receivable clerk for Evers Industries prepared the following partially completed aging of receivables schedule as of the end of business on July 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 July 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
- Aging of receivables; estimating allowance for doubtful accounts Trophy Fish Company supplies flies and fishing gear 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, 20Y4: The following accounts were unintentionally omitted from the aging schedule. Assume all due dates are for the current year except for Wolfe Sports, which is due in the next year. Trophy Fish 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 Trophy Fish Company has a debit balance of 3,600 before adjustment on December 31. Journalize the adjusting entry 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_forwardThe accounts receivable clerk for Kirchhoff 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_forwardThe 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
- 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…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, 20Y1: Not Days Past Due Past Over Customer Balance Due 1-30 31-60 61-90 91-120 120 ABC Beauty 15,000 15,000 Angel Wigs 8,000 8,000 Zodiac Beauty 3,000 3,000 Subtotals 875,000 415,000 210,000 112,000 55,000 18,000 65,000 The following accounts were unintentionally omitted from the aging schedule: Customer Due Date Balance Arcade Beauty Aug. 17, 20Y1 $10,000 Creative Images Oct. 30, 20Y1 8,500 Excel Hair Products July 3, 20Y1 7,500 First Class Hair Care Sept. 8, 20Y1 6,600 Golden Images Nov. 23, 20Y1…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: Not Days Past Due Past Customer Balance Due 1-30 31-60 61-90 91-120 Over 120 АВС Веauty 19,000 19,000 Angel Wigs 7,100 7,100 Zodiac Beauty 3,500 3,500 Subtotals 1,316,900 752,700 299,000 128,300 39,800 16,400 80,700 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 4,700 Excel Hair Products July 3 8,500 First Class Hair Care Sept. 8 6,700 Golden Images Nov. 23 3,300 Ob That Eair Nov 2Oarrow_forward
- 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 21,000 21,000 Angel Wigs 7,600 7,600 Zodiac Beauty 3,500 3,500 Subtotals 1,305,100 746,400 294,000 125,900 43,800 16,400 78,600 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 $4,500 Creative Images Oct. 30 4,900 Excel Hair Products…arrow_forwardAging of receivables; estimating allowance for doubtful accounts Trophy Fish Company supplies flies and fishing gear 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, 20Y6:arrow_forwardWig 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 Balance Not Past Due 1-30 31-60 61-90 91-120 over 120 798,100 443,000 191,500 87,800 29,500 26,300 20,000 The following accounts were unintentionally omitted from the aging schedule: Customer Due Date Balance Arcade Beauty May 28, 20Y1 $3,200 Creative Images Sept. 7, 20Y1 6,700 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 3,900 One Stop Hair Designs Dec. 2, 20Y1 2,500 Visions Hair and Nail Jan. 5, 20Y2 8,200 Wig Creations has a past history of uncollectible accounts by age category, as follows: Age Class Percent Uncollectible Not…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Financial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,
Financial AccountingAccountingISBN:9781337272124Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
Financial AccountingAccountingISBN:9781305088436Author:Carl Warren, Jim Reeve, Jonathan DuchacPublisher:Cengage Learning
Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,
Financial Accounting
Accounting
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Financial Accounting
Accounting
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Cengage Learning
Accounts Receivable and Accounts Payable; Author: The Finance Storyteller;https://www.youtube.com/watch?v=x_aUWbQa878;License: Standard Youtube License