Question

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:

1			Not	Days Past Due	Days Past Due	Days Past Due	Days Past Due	Days Past Due
2			Past
3	Customer	Balance	Due	1-30	31-60	61-90	91-120	Over 120
4	AAA Outfitters	20,000.00	20,000.00
5	Brown Trout Fly Shop	7,500.00			7,500.00
6	~~~~~	~~~~~	~~~~~	~~~~~	~~~~~	~~~~~	~~~~~	~~~~~
7
8	Zigs Fish Adventures	4,000.00		4,000.00
9	Subtotals	1,300,000.00	750,000.00	290,000.00	120,000.00	40,000.00	20,000.00	80,000.00

The following accounts were unintentionally omitted from the aging schedule:

Customer	Due Date	Balance
Adams Sports & Flies	May 22, 20Y6	$5,000
Blue Dun Flies	Oct. 10, 20Y6	4,900
Cicada Fish Co.	Sept. 29, 20Y6	8,400
Deschutes Sports	Oct. 20, 20Y6	7,000
Green River Sports	Nov. 7, 20Y6	3,500
Smith River Co.	Nov. 28, 20Y6	2,400
Western Trout Company	Dec. 7, 20Y6	6,800
Wolfe Sports	Jan. 20, 20Y7	4,400

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	10
61–90 days past due	30
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 preceding accounts. If an account is not past due, enter a zero.
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, 20Y6. Journalize the adjusting entry for uncollectible accounts. Refer to the chart of accounts for a listing of the account titles the company uses.
5.	Assume that the adjusting entry in (4) was inadvertently omitted, how would the omission affect the balance sheet and income statement?

Chart of Accounts

CHART OF ACCOUNTS
Trophy Fish Company
General Ledger
ASSETS 110 Cash 111 Petty Cash 121 Accounts Receivable-Adams Sports & Flies 122 Accounts Receivable-Blue Dun Flies 123 Accounts Receivable-Cicada Fish Co. 124 Accounts Receivable-Deschutes Sports 125 Accounts Receivable-Green River Sports 126 Accounts Receivable-Smith River Co. 127 Accounts Receivable-Western Trout Company 128 Accounts Receivable-Wolfe Sports 129 Allowance for Doubtful Accounts 131 Interest Receivable 132 Notes Receivable 141 Merchandise Inventory 145 Office Supplies 146 Store Supplies 151 Prepaid Insurance 181 Land 191 Store Equipment 192 Accumulated Depreciation-Store Equipment 193 Office Equipment 194 Accumulated Depreciation-Office Equipment LIABILITIES 210 Accounts Payable 211 Salaries Payable 213 Sales Tax Payable 214 Interest Payable 215 Notes Payable EQUITY 310 Owner, Capital 311 Owner, Drawing 312 Income Summary	REVENUE 410 Sales 610 Interest Revenue EXPENSES 510 Cost of Merchandise Sold 520 Sales Salaries Expense 521 Advertising Expense 522 Depreciation Expense-Store Equipment 523 Delivery Expense 524 Repairs Expense 529 Selling Expenses 530 Office Salaries Expense 531 Rent Expense 532 Depreciation Expense-Office Equipment 533 Insurance Expense 534 Office Supplies Expense 535 Store Supplies Expense 536 Credit Card Expense 537 Cash Short and Over 538 Bad Debt Expense 539 Miscellaneous Expense 710 Interest Expense

Answer 1

$3,600 Debit Balance given in question.

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