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?

BuyFind

Financial Accounting

15th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781337272124
BuyFind

Financial Accounting

15th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781337272124

Solutions

Chapter
Section
Chapter 9, Problem 2PB
Textbook Problem

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:

Chapter 9, Problem 2PB, Wig Creations Company supplies wigs and hair care products to beauty salons throughout Texas and the , example  1

The following accounts were unintentionally omitted from the aging schedule:

Chapter 9, Problem 2PB, Wig Creations Company supplies wigs and hair care products to beauty salons throughout Texas and the , example  2

Wig Creations has a past history of uncollectible accounts by age category, as follows:

Chapter 9, Problem 2PB, Wig Creations Company supplies wigs and hair care products to beauty salons throughout Texas and the , example  3

Instructions

  1. 1. Determine the number of days past due for each of the preceding accounts.
  2. 2. Complete the aging of receivables schedule by adding the omitted accounts to the bottom of the schedule and updating the totals.
  3. 3. Estimate the allowance for doubtful accounts, based on the aging of receivables schedule.
  4. 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. 5. Assuming that the adjusting entry in (4) was inadvertently omitted, how would the omission affect the balance sheet and income statement?

Expert Solution

Want to see the full answer?

Check out a sample textbook solution.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

*Response times vary by subject and question complexity. Median response time is 34 minutes and may be longer for new subjects.

Chapter 9 Solutions

Financial Accounting
Ch. 9 - Journalize the following transactions, using the...Ch. 9 - Journalize the following transactions, using the...Ch. 9 - Journalize the following transactions, using the...Ch. 9 - Journalize the following transactions, using the...Ch. 9 - At the end of the current year, Accounts...Ch. 9 - At the end of the current year, Accounts...Ch. 9 - At the end of the current year, Accounts...Ch. 9 - At the end of the current year, Accounts...Ch. 9 - Lundquist Company received a 60-day, 9% note for...Ch. 9 - Prefix Supply Company received a 120-day, 8% note...Ch. 9 - Financial statement data for years ending December...Ch. 9 - Financial statement data for years ending December...Ch. 9 - Boeing is one of the worlds major aerospace firms...Ch. 9 - MGM Resorts International owns and operates hotels...Ch. 9 - Journalize the following transactions in the...Ch. 9 - Journalize the following transactions in the...Ch. 9 - Quantum Solutions Company, a computer consulting...Ch. 9 - At the end of the current year, the accounts...Ch. 9 - Toot Auto Supply distributes new and used...Ch. 9 - The accounts receivable clerk for Kirchhoff...Ch. 9 - Kirchhoff Industries has a past history of...Ch. 9 - Using data in Exercise 9-9, assume that the...Ch. 9 - Performance Bike Co. is a wholesaler of motorcycle...Ch. 9 - Using the data in Exercise 9-11, assume that the...Ch. 9 - The following selected transactions were taken...Ch. 9 - The following selected transactions were taken...Ch. 9 - During its first year of operations, Macks...Ch. 9 - Using the data in Exercise 9-15, assume that...Ch. 9 - Casebolt Company wrote off the following accounts...Ch. 9 - Seaforth International wrote off the following...Ch. 9 - Determine the due date and the amount of interest...Ch. 9 - Spring Designs Decorators issued a 120-day, 4%...Ch. 9 - The series of five transactions recorded in the...Ch. 9 - The following selected transactions were completed...Ch. 9 - Journalize the following transactions of Trapper...Ch. 9 - Journalize the following transactions in the...Ch. 9 - List any errors you can find in the following...Ch. 9 - Ralph Lauren Corporation designs, markets, and...Ch. 9 - The Campbell Soup Company manufactures and markets...Ch. 9 - American Eagle Outfitters, Inc. sells clothing,...Ch. 9 - Use the data in Exercises 9-27 and 9-28 to analyze...Ch. 9 - The following transactions were completed by Daws...Ch. 9 - Trophy Fish Company supplies flies and fishing...Ch. 9 - Call Systems Company, a telephone service and...Ch. 9 - Flush Mate Co. wholesales bathroom fixtures....Ch. 9 - The following data relate to notes receivable and...Ch. 9 - The following were selected from among the...Ch. 9 - The following transactions were completed by The...Ch. 9 - Wig Creations Company supplies wigs and hair care...Ch. 9 - Digital Depot Company, which operates a chain of...Ch. 9 - Gen-X Ads Co. produces advertising videos. During...Ch. 9 - The following data relate to notes receivable and...Ch. 9 - The following were selected from among the...Ch. 9 - Bud Lighting Co. is a retailer of commercial and...Ch. 9 - Bev Wynn, vice president of operations for Dillon...Ch. 9 - On January 1, Xtreme Co. began offering credit...Ch. 9 - For several years, Xtreme Co.s sales have been on...Ch. 9 - Best Buy is a specialty retailer of consumer...Ch. 9 - Apple Inc. designs, manufactures, and markets...Ch. 9 - Costco Wholesale Corporation operates membership...

Additional Business Textbook Solutions

Find more solutions based on key concepts
How is a DBMS different from a database?

Accounting Information Systems

Does interest rate parity imply that interest rates are the same in all countries?

Fundamentals of Financial Management, Concise Edition (MindTap Course List)

Describe the major leadership styles.

Foundations of Business (MindTap Course List)

Edmund Enterprises recently made a large investment to upgrade its technology. Although these improvements wont...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

Assets are items that are owned by the business and are expected to provide future benefits.

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)