financial accounting 81

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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 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, 20Y4: ($121,000)

A B C D E F G H

1. Not Days Past Due

2. Past

3. Customer, Balance, Due, 1-30, 31-60, 61-90, 91-120, over 120

4. AAA Outfitters, 20,000, 20,000

5. Brown Trout Fly Shop, 7,500 7,500

30. Zigs Fish Adventures, 4,000 ,4000

31. Subtotals, 1,300,000, 750,000, 290,000, 120,000, 40,000, 20,000, 80,000

.The following accounts were unintentionally omitted from the aging schedule. Assume all due dates are for the current year except for Wolfe Sports, which is due in the next year.

.Customer .Due Dates Balance

Adams Sports & Flies May 22 $5,000

Blue Dun Flies Oct. 10 4,900

Cicada Fish Co. Sept. 29 8,400

Deschutes Sports Oct. 20 7,000

Green River Sports Nov. 7 3,500

Smith River Co. Nov. 28 2,400

Western Trout Company Dec. 7 6,800

Wolfe Sports Jan. 20 4,400

.Trophy Fish has a past history of uncollectable accounts by age category, as follows:

Age Class Percent Uncollectable

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

.Instructions

1. Determine the number of days past due for each of the proceeding accounts.

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 receivable 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. Journalize the adjusting entry for uncollectable accounts.

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

 
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