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Wig Creations Company supplies wigs and hair care products tobeauty salons throughout Texas and the Southwest. The accountsreceivable clerk for Wig Creations prepared the following partiallycompleted aging of receivables schedule as of the end of businesson December 31, 2015:
1
A
B
C
D
E
F
G
H
2
Days Past Due
Days Past Due
Days Past Due
Days Past Due
Days Past Due
3
Customer
Balance
Not Past Due
1-30
31-60
61-90
91-120
Over 120
4
ABC Beauty
15,000.00
15,000.00
5
Angel Wigs
8,000.00
8,000.00
6
~~~~~
~~~~~
~~~~~
~~~~~
~~~~~
~~~~~
~~~~~
~~~~~
7
Zodiac Beauty
3,000.00
3,000.00
8
Subtotals
875,000.00
415,000.00
210,000.00
112,000.00
55,000.00
18,000.00
65,000.00
The following accounts were unintentionally omitted from theaging schedule:
Customer
Due Date
Balance
Arcade Beauty
Aug. 17, 2015
$10,000
Creative Images
Oct. 30, 2015
8,500
Excel Hair Products
July 3, 2015
7,500
First Class Hair Care
Sept. 8, 2015
6,600
Golden Images
Nov. 23, 2015
3,600
Oh That Hair
Nov. 29, 2015
1,400
One Stop Hair Designs
Dec. 7, 2015
4,000
Visions Hair & Nail
Jan. 11, 2016
9,000
Wig Creations has a past history of uncollectible accounts byage 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%
Required:
1.
Determine the number of days past due for each of the precedingaccounts. If an account is not past due, enter a zero.
2.
Complete the aging of receivables schedule by adding theomitted accounts to the bottom of the schedule and updating thetotals.
3.
Estimate the allowance for doubtful accounts, based on theaging of receivables schedule.
4.
Assume that the allowance for doubtful accounts for WigCreations has a credit balance of $7,375 before adjustment onDecember 31, 2015. Journalize the adjustment for uncollectibleaccounts. Refer to the chart of accounts for a listing of theaccount titles the company uses.
5.
Assume that the adjusting entry in (4) was inadvertentlyomitted, how would the omission affect the balance sheet and incomestatement?
Starting Question
Shaded cells have feedback.
1. Determine the number of days past due for each of thefollowing accounts. If an account is not past due, enter azero.
Customer
Due Date
Number of Days Past Due
Arcade Beauty
Aug. 17, 2015
days
Creative Images
Oct. 30, 2015
days
Excel Hair Products
July 3, 2015
days
First Class Hair Care
Sept. 8, 2015
days
Golden Images
Nov. 23, 2015
days
Oh That Hair
Nov. 29, 2015
days
One Stop Hair Designs
Dec. 7, 2015
days
Visions Hair & Nail
Jan. 11, 2016
days
Points:
7 / 8
Feedback
Check My Work
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 allmonths have an equal number of days.
Aging of Receivables Schedule
Shaded cells have feedback.
2. Complete the aging of receivables schedule by adding theomitted accounts to the bottom of the schedule and updating thetotals. If an amount box does not require an entry, leave itblank.
Question not attempted.
Score: 0/173
Aging of Receivables Schedule
December 31, 2015
1
Days Past Due
Days Past Due
Days Past Due
Days Past Due
Days Past Due
2
Customer
Balance
Not Past Due
1-30
31-60
61-90
91-120
Over 120
3
ABC Beauty
15,000.00
15,000.00
4
Angel Wigs
8,000.00
8,000.00
5
~~~~~
~~~~~
~~~~~
~~~~~
~~~~~
~~~~~
~~~~~
~~~~~
6
Zodiac Beauty
3,000.00
3,000.00
7
Subtotals
875,000.00
415,000.00
210,000.00
112,000.00
55,000.00
18,000.00
65,000.00
8
Arcade Beauty
9
Creative Images
10
Excel Hair Products
11
First Class Hair Care
12
Golden Images
13
Oh That Hair
14
One Stop Hair Designs
15
Visions Hair & Nail
16
Totals
17
Percentage uncollectible
18
Estimate of uncollectible accounts
Points:
0 / 36
Feedback
Check My Work
Add the accounts into the aging schedule based on their numberof days past due.
Apply the respective uncollectible percentage to the totalreceivables in each days past due group and the not past duegroup.
Additional Question
Shaded cells have feedback.
3. Estimate the allowance for doubtful accounts, based on theaging of receivables schedule.
$
Points:
0 / 1
Feedback
Check My Work
Journal
Shaded cells have feedback.
4. Assume that the allowance for doubtful accounts for WigCreations has a credit balance of $7,375 before adjustment onDecember 31, 2015. Journalize the adjustment for uncollectibleaccounts. Refer to the chart of accounts for a listing of theaccount titles the company uses.
Question not attempted.
PAGE 1
JOURNAL
Score: 0/25
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