Question

Aging of Receivables; Estimating Allowance for Doubtful Accounts Wig Creations Company supplies wigs and hair care products to beauty salons throughout Texas and the Southwest. The accounts receivable clerk for Wig Creations prepared the following partially completed aging of receivables schedule as of the end of business on December 31, 2017: Not Days Past Due Past Customer Balance 1-30 31-60 61-90 91-120 Over 120 Due 19,000 ABC Beauty 19,000 Angel Wigs 7,300 7,300 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 4,000 4,000 Zodiac Beauty Subtotals 1,292,200 749,000 285,000 121,800 36,300 20,100 80,000 The following accounts were unintentionally omitted from the aging schedule. Assume all due dates are for the current year except for Visions Hair & Nail, which is due in the next year. Customer Due Date Balance Arcade Beauty Aug. 17 $5,000 Creative Images Oct. 30 5,100 Excel Hair Products July 3 8,000 First Class Hair Care Sept. 8 7,500 Golden Images Nov. 23 3,700 Oh That Hair Nov. 29 2,900 One Stop Hair Designs Dec. 7 6,800 Visions Hair & Nail Jan. 11 3,900 Wig Creations has a past history of uncollectible accounts by age category, as follows:
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Answer 1

Answer to 1

No. of days past due = 31-Dec-17 (-) Due date

Customer	Due date	No. of days past due
Arcade Beauty	17-Aug-17	136
Creative Images	30-Oct-17	62
Excel Hair Products	3-Jul-17	181
First Class Hair care	8-Sep-17	114
Golden Images	23-Nov-17	38
Oh that Hair	29-Nov-17	32
One stop hair designs	7-Dec-17	24
Visions Hair and nail	11-Jan-18	0

Answer to 2

As at 31 Dec 2017
			Days past due
Customer	Balance	Not past due	1-30	31-60	61-90	91-120	Over 120
ABC Beauty	19,000	19,000
Angel Wings	7,300			7,300
Zodiac Beauty	4,000		4,000
Subtotals	1,292,200	749,000	285,000	121,800	36,300	20,100	80,000
Arcade Beauty	5,000						5,000
Creative Images	5,100				5,100
Excel Hair Products	8,000						8,000
First Class Hair care	7,500					7,500
Golden Images	3,700			3,700
Oh that Hair	2,900			2,900
One stop hair designs	6,800		6,800
Visions Hair and nail	3,900	3,900
Zodiac Beauty	4,000		4,000
Total	1,339,100	752,900	295,800	128,400	41,400	27,600	93,000
Percent uncollectable (%)		1%	3%	9%	31%	39%	83%
Estimate of uncollectable accounts	128,747	7,529	8,874	11,556	12,834	10,764	77,190

Answer to 3

Allowance for doubtful debts as per above = $128747

Answer to 4

Journal entry:

Profit and loss A/c(Dr.) $128747

Allowance for doubtful debts $128747