Question

1. Aging of Receivables; Estimating The contra asset account for accounts receivable.Allowance for Doubtful Accounts

   Trophy Fish Company supplies flies and fishing gear products to sporting goods stores and outfitters throughout the western United States. The A claim against the customer created by selling merchandise or services on credit.accounts receivable clerk for Trophy Fish 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
   AAA Outfitters	21,000		21,000
   Brown Trout Fly Shop	7,400						7,400
   Zigs Fish Adventures	4,300				4,300
   Subtotals	1,305,500		744,900		297,800		129,800		37,000		18,100		77,900

   The following accounts were unintentionally omitted from the aging schedule:

   Customer	Due Date		Balance
   Adams Sports and Flies		May 22	$4,900
   Blue Dun Flies		Oct. 10	4,500
   Cicada Fish Co.		Sept. 29	8,700
   Deschutes Sports		Oct. 20	7,300
   Green River Sports		Nov. 7	3,700
   Smith River Co.		Nov. 28	2,800
   Western Trout Company		Dec. 7	6,600
   Wolfe Sports		Jan. 20	4,800

   Trophy Fish 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	2
   31-60 days past due	8
   61-90 days past due	32
   91-120 days past due	41
   Over 120 days past due	76

   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
   Adams Sports and Flies	May 22	days
   Blue Dun Flies	Oct. 10	days
   Cicada Fish Co.	Sept. 29	days
   Deschutes Sports	Oct. 20	days
   Green River Sports	Nov. 7	days
   Smith River Co.	Nov. 28	days
   Western Trout Company	Dec. 7	days
   Wolfe Sports	Jan. 20	days

   Feedback

   2. Complete the aging of receivables schedule by adding the omitted accounts to the bottom of the schedule and updating the totals. If an amount box does not require an entry, leave it blank.

   Trophy Fish Company
   Aging of Receivables Schedule
   December 31, 20Y7
   Customer	Balance	Not Past Due	Days Past Due 1-30	Days Past Due 31-60	Days Past Due 61-90	Days Past Due 91-120	Days Past Due Over 120
   AAA Outfitters	21,000	21,000
   Brown Trout Fly Shop	7,400			7,400
   Zigs Fish Adventures	4300		4300
   Subtotals	1,305,500	744,900	297,800	129,800	37,000	18,100	77,900
   Adams Sports and Flies
   Blue Dun Flies
   Cicada Fish Co.
   Deschutes Sports
   Green River Sports
   Smith River Co.
   Western Trout Company
   Wolfe Sports
   Totals
   Percent uncollectible (%)		%	%	%	%	%	%
   Estimate of uncollectible accounts	$	$	$	$	$	$	$

   Feedback

   3. Estimate the allowance for doubtful accounts, based on the aging of receivables schedule.
   $

   Feedback

   4. Assume that the allowance for doubtful accounts for Trophy Fish has a credit balance of $3,000 before adjustment on December 31, 20Y7. Journalize the adjustment for uncollectible accounts.

   Dec. 31	Accounts Payable Accounts Receivable Allowance for Doubtful Accounts Bad Debt Expense Cash Sales
   	Accounts Payable Accounts Receivable Allowance for Doubtful Accounts Bad Debt Expense Cash Sales

   Feedback

   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
   • understated
   by $ because the allowance for doubtful accounts would be
   • overstated
   • understated
   by $. In addition, the stockholders’ equity (retained earnings) would be
   • overstated
   • understated
   by $ because bad debt expense would be
   • overstated
   • understated
   and net income
   • overstated
   • understated
   by $ on the income statement.

Answer 1

Please hit LIKE button if this helped. For any further explanation, please put your query in comment, will get back to you.
1.			(31 Dec 2017-Due Date)
	Customer	Due date	Number of Days past due
	Adam Sports and Files	22-May-17	223
	Blue Dun Files	10-Oct-17	82
	Cicada Fish Co	29-Sep-17	93
	Deschutes Sports	20-Oct-17	72
	Green River Sports	07-Nov-17	54
	Smith River Co	28-Nov-17	33
	Western Trout Co	07-Dec-17	24
	Wolfe Sports	20-Jan-18	0
2,3	Customer	Balance	Not past Due	1-30	31-60	61-90	91-120	over 120
	AAA outfittes	$                21,000	$                                    21,000
	Brown Trout Fly Shop	$                  7,400			$                         7,400
	Zing Fish Adventure	$                  4,300		$              4,300
	Subtotals	$          1,305,500	$                                  744,900	$          297,800	$                    129,800	$         37,000	$         18,100	$         77,900
	Adam Sports and Files	$                  4,900						$            4,900
	Blue Dun Files	$                  4,500				$            4,500
	Cicada Fish Co	$                  8,700					$            8,700
	Deschutes Sports	$                  7,300				$            7,300
	Green River Sports	$                  3,700			$                         3,700
	Smith River Co	$                  2,800			$                         2,800
	Western Trout Co	$                  6,600		$              6,600
	Wolfe Sports	$                  4,800	$                                      4,800
	Total	$          1,348,800	$                                  749,700	$          304,400	$                    136,300	$         48,800	$         26,800	$         82,800
	% Uncollectible		1%	2%	8%	32%	41%	76%
	Estimate of Uncollectible Accounts	$              114,021	$                                      7,497	$              6,088	$                      10,904	$         15,616	$         10,988	$         62,928
4
	Bad Debt Expense	Debit	$                                  111,021		$114,021-$3,000
	Allowance for Uncollectible Accounts	Credit		$          111,021
5.
	Assets to be	Overstated	by	$          111,021
	Owner's Capital to be	Overstated	by	$          111,021
	Expenses to be	Understated	by	$          111,021
	Net Income to be	Overstated	by	$          111,021