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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, 2017: Not Days Past Due Past Customer Balance Due 31-60 61-90 91-120 Over 120 ARC Beauty 20.100 20,100 Angel Wigs 7.500 7.800 Zodiac Beauty 3,700 Subtotals 1,308,700 757,000 283,900 125,300 41,000 24,200 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 $5.200 Creative Images 5.100 Excel Mar Products First Class Hair Care 6,600 Golden Images 3.500 Oh That Hair 2,000 One Stop Hair Designs Dec. 2 6,400 Visions Hair & Nail Jan. 11 4,500 Wie Creations has past history of uncollectible accounts by age category, as follows: " R Age Class Percent Uncollectible 1 % Not past due 1-30 days past due 31-60 days past due 61-90 days past due 91-120 days past due Over 120 days past due 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 136 days Arcade Beauty Aug. 17 Creative Images Oct. 30 52 days Excel Hair Products July 3 Sept. 8 181 114 days days First Class Hair Care Golden Images Nov. 23 Oh That Hair 32 days days days days Nov. 29 Dec. 7 Jan. 11 One Stop Hair Designs 24 0 Visions Hair & Nail Count the number of days after the due date up to December 31. Do not include the due date in your count. Remember that not all months have an equa Check My Work Email Instructor Save and Wig Creations Company Aging of Receivables Schedule December 31, 2047 Not Past Days Past Days Past Due Due 1-30 Due 31-60 20,100 7,800 Days Past Due 61-90 Days Past Due 91-120 Days Past Due Over 120 Customer ABC Beauty Angel Wigs Balance 20,100 7,800 3,700 3,700 Zodiac Beauty Subtotals 1,308,700 252.0 283,900 Arcade Beauty Creative Images Excel Hair Products First Class Hair Care Golden Images Oh That Hair One Stop Hair Designs Visions Hair & Nail Totals Percent uncollectible (%) Estimate of uncollectible accounts I In Chart Work 3. Estimate the allowance for doubtful accounts, based on the aging of receivables schedule. Check My W 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 $4,100 before adjustment on December 31, 2017. Journalize the adjustment for uncollectible accounts. If an amount box does not require an entry, leave it blank. Dec. 31 Bad Debt Expense Allowance for Doubtful Accounts 5. 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 overstated by because the allowance for doubtful accounts would be understated by s In addition, the stockholders' equity retained earnings) would be overstated by because bad debt expense would be understated income overstated by on the income statement and net

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