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	20,700.00	20,700.00
5	Brown Trout Fly Shop	7,100.00			7,100.00
6	~~~~~	~~~~~	~~~~~	~~~~~	~~~~~	~~~~~	~~~~~	~~~~~
7
8	Zigs Fish Adventures	3,900.00		3,900.00
9	Subtotals	1,307,400.00	756,200.00	292,000.00	118,400.00	41,000.00	18,100.00	81,700.00

The following accounts were unintentionally omitted from the aging schedule:

Customer	Due Date	Balance
Adams Sports & Flies	May 22, 20Y6	$5,100
Blue Dun Flies	Oct. 10, 20Y6	5,400
Cicada Fish Co.	Sept. 29, 20Y6	8,200
Deschutes Sports	Oct. 20, 20Y6	7,100
Green River Sports	Nov. 7, 20Y6	3,000
Smith River Co.	Nov. 28, 20Y6	2,600
Western Trout Company	Dec. 7, 20Y6	6,600
Wolfe Sports	Jan. 20, 20Y7	4,900

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	9
61–90 days past due	32
91–120 days past due	41
Over 120 days past due	85

	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 $4,400 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?

Answer 1

Customer	Due date	No. of days	Balance	Not past due	1-30	31-60	61-90	91-120	over 120
AAA Outfitters			20700	20700
Brown trout fly shop			7100			7100
Zig fish adventures			3900		3900
Adams Sports & flies	5/22/2016	223	5100						5100
Blue dun flies	10/10/2016	82	5400				5400
Cicada fish Co.	9/29/2016	93	8200					8200
Deschutes sports	10/20/2016	72	7100				7100
Green river sports	11/7/2016	54	3000				3000
Smith river co.	11/28/2016	33	2600			2600
Western trout co.	12/7/2016	24	6600		6600
Wolfe sports	1/20/2017	0	4900	4900
Total			1307400	756200	292000	118400	41000	18100	81700
Revised totals…(A)			1350300	761100	298600	121000	56500	26300	86800
Uncollectible %...(B)				1%	3%	9%	32%	41%	85%
Doubtful debts…(A*B)			130102	7611	8958	10890	18080	10783	73780

Since Doubtful debt A/c has 4400$ as balance, entry would be -

Doubtful debt A/c (P/L)	125702
To Doubtful accounts		125702