Question

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, 2017: Not Days Past Due Past Customer Balance Due 1-30 31-60 61-90 91-120 Over 19,500 AAA Outfitters Brown Trout Fly Shop 19,600 7,300 7,300 Nov. 7 Zigs Fish 3,900 3,900 Adventures Subtotals 1,311,900 750,700 297,000 130,000 36,700 16,900 80,600 The following accounts were unintentionally omitted from the aging schedule: Customer Due Date Balance Adams Sports and May 22 $5,500 Flies Blue Dun Flies Oct. 10 5,200 Cicada Fish Co. Sept. 29 8,200 Deschutes Sports Oct. 20 7,400 Green River 3,500 Sports Smith River Co. Nov. 28 2,800 Western Trout Dec. 7 7,200 Company Wolfe Sports Jan. 20 Trophy Fish has a past history of uncollectible accounts by age category, as follows: Percent Age Class Uncollectible Not past due 1% 1-30 days past due 31-60 days past due 61-90 days past due 91-120 days past due Over 120 days past due Required: 4,900

Answer 1

Answer to Question 1:

82 Question 1 Aging of Receivables as on 31st December, 2017 To calculate number of days past due, we will count the number of days from Due date to our reporting date which is 31st December, 2017 Determination of number of days past due for the following: Number of Days Calculation for Number of days Customer Due Date Past Due (31 days of May - 22 days of May + + 30 days of June + 31 days Adam Sports and of July + 31 days of August + 30 days of September +31 days of Flies 22-May October + 30 days of November +31 days of December) (31 days of October - 10 days of October + 30 days of Bun Dun Flies 10-Oct November +31 days of December) (30 days of September - 29 days of September +31 days of Cicade Fish Co. 29-Sep 93 October + 30 days of November +31 days of December) (31 days of October - 20 days of October + 30 days of Deschutes Sports 20-Oct 172 November +31 days of December) (30 days of November - 7 days of November +31 days of Green River Sports 07-Nov 54 December) (30 days of November - 28 days of November +31 days of Smith River Co. 28-Nov 33 December) Western Trout Company 07-Dec 124 (31 days of December - 7 days of December) Its due date is on 20th January, hence as of 31st December, it is not due. Wolfe Sports 20-Jan Hence 0 days as it is not due.

Answer to Question 2:

Question 2 Trout Fish Company Aging of Accounts Receivables 31-Dec 2017 Days past Not past due Due 1-30 $ 750,700 $ 297,000 Balance $ 1,311,900 Days past Due 31-60 $ 130,000 Days past Due 61-90 $ 36,700 Days past Days past Due 91-120 Over 120 days $ 16,900 $ 80,600 $ 5,500 $ 5,200 $ $ 8.200 5,500 5,200 8,200 7,400 3,500 2,800 $ 7,400 $ $ $ $ 3,500 2,800 Customer Subtotals Adam Sports and Flies Bun Dun Flies Cicade Fish Co. Deschutes Sports Green River Sports Smith River Co. Western Trout Company Wolfe Sports Total Percent Uncollectible (%) Estimate of Uncollectible accounts Calculation 7,200 $ 7,200 $ 4,900 $ $ 1,356,600 $ 4,900 755,600 $ 304,200 $ 136,300 $ 49,300 $ 25,100 $ 86,100 1% 3% 8% 31% 38% 82% $ 123,009 $ 7,556 $ 9,126 $ 10,904 $ 15,283$ 9,538 $ 70,602 ($755,600 X 1%) ($304,000 X 3%) ($136,000 X 8%) ($49,300 X 31%) ($25,100 X 38%) ($86,100 X 82%)

Answer to Question 3 and 4:

Question 3 The total estimate of doubtful debts is $123,009 Question 4 Since allowance for doubtful debt already has credit balance of $4,100 and the we need to bring it to credit balance of $123,009. Hence a total adjustment of $123,009 - $4,100 = $118,909 will be required. Accounting Entry Account Debit Credit Bad debt Expense $ 118,909 Allowance for doubtful debts 118,909 (To record the estimated uncollectible receivables)