Question

Aging of Receivables; Estimating 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 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	19,600		19,600
Brown Trout Fly Shop	7,000						7,000
Zigs Fish Adventures	4,100				4,100
Subtotals	1,304,700		755,600		283,700		126,700		38,200		19,400		81,100

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	5,100
Cicada Fish Co.		Sept. 29	8,900
Deschutes Sports		Oct. 20	7,400
Green River Sports		Nov. 7	3,700
Smith River Co.		Nov. 28	2,700
Western Trout Company		Dec. 7	7,100
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	3
31-60 days past due	12
61-90 days past due	30
91-120 days past due	40
Over 120 days past due	85

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	19,600	19,600
Brown Trout Fly Shop	7,000			7,000
Zigs Fish Adventures	4100		4100
Subtotals	1,304,700	755,600	283,700	126,700	38,200	19,400	81,100
Adams Sports and Flies	fill in the blank d827faf49fe2fbb_1	fill in the blank d827faf49fe2fbb_2	fill in the blank d827faf49fe2fbb_3	fill in the blank d827faf49fe2fbb_4	fill in the blank d827faf49fe2fbb_5	fill in the blank d827faf49fe2fbb_6	fill in the blank d827faf49fe2fbb_7
Blue Dun Flies	fill in the blank d827faf49fe2fbb_8	fill in the blank d827faf49fe2fbb_9	fill in the blank d827faf49fe2fbb_10	fill in the blank d827faf49fe2fbb_11	fill in the blank d827faf49fe2fbb_12	fill in the blank d827faf49fe2fbb_13	fill in the blank d827faf49fe2fbb_14
Cicada Fish Co.	fill in the blank d827faf49fe2fbb_15	fill in the blank d827faf49fe2fbb_16	fill in the blank d827faf49fe2fbb_17	fill in the blank d827faf49fe2fbb_18	fill in the blank d827faf49fe2fbb_19	fill in the blank d827faf49fe2fbb_20	fill in the blank d827faf49fe2fbb_21
Deschutes Sports	fill in the blank d827faf49fe2fbb_22	fill in the blank d827faf49fe2fbb_23	fill in the blank d827faf49fe2fbb_24	fill in the blank d827faf49fe2fbb_25	fill in the blank d827faf49fe2fbb_26	fill in the blank d827faf49fe2fbb_27	fill in the blank d827faf49fe2fbb_28
Green River Sports	fill in the blank d827faf49fe2fbb_29	fill in the blank d827faf49fe2fbb_30	fill in the blank d827faf49fe2fbb_31	fill in the blank d827faf49fe2fbb_32	fill in the blank d827faf49fe2fbb_33	fill in the blank d827faf49fe2fbb_34	fill in the blank d827faf49fe2fbb_35
Smith River Co.	fill in the blank d827faf49fe2fbb_36	fill in the blank d827faf49fe2fbb_37	fill in the blank d827faf49fe2fbb_38	fill in the blank d827faf49fe2fbb_39	fill in the blank d827faf49fe2fbb_40	fill in the blank d827faf49fe2fbb_41	fill in the blank d827faf49fe2fbb_42
Western Trout Company	fill in the blank d827faf49fe2fbb_43	fill in the blank d827faf49fe2fbb_44	fill in the blank d827faf49fe2fbb_45	fill in the blank d827faf49fe2fbb_46	fill in the blank d827faf49fe2fbb_47	fill in the blank d827faf49fe2fbb_48	fill in the blank d827faf49fe2fbb_49
Wolfe Sports	fill in the blank d827faf49fe2fbb_50	fill in the blank d827faf49fe2fbb_51	fill in the blank d827faf49fe2fbb_52	fill in the blank d827faf49fe2fbb_53	fill in the blank d827faf49fe2fbb_54	fill in the blank d827faf49fe2fbb_55	fill in the blank d827faf49fe2fbb_56
Totals	fill in the blank d827faf49fe2fbb_57	fill in the blank d827faf49fe2fbb_58	fill in the blank d827faf49fe2fbb_59	fill in the blank d827faf49fe2fbb_60	fill in the blank d827faf49fe2fbb_61	fill in the blank d827faf49fe2fbb_62	fill in the blank d827faf49fe2fbb_63
Percent uncollectible (%)		fill in the blank d827faf49fe2fbb_64%	fill in the blank d827faf49fe2fbb_65%	fill in the blank d827faf49fe2fbb_66%	fill in the blank d827faf49fe2fbb_67%	fill in the blank d827faf49fe2fbb_68%	fill in the blank d827faf49fe2fbb_69%
Estimate of uncollectible accounts	$fill in the blank d827faf49fe2fbb_70	$fill in the blank d827faf49fe2fbb_71	$fill in the blank d827faf49fe2fbb_72	$fill in the blank d827faf49fe2fbb_73	$fill in the blank d827faf49fe2fbb_74	$fill in the blank d827faf49fe2fbb_75	$fill in the blank d827faf49fe2fbb_76

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 has a credit balance of $3,000 before adjustment on December 31, 20Y7. Journalize the adjustment for uncollectible accounts.

5. Assume that the adjusting entry in (4) was inadvertently omitted, how would the omission affect the balance sheet and income statement?

Answer 1