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 derk for Wig Creations prepared the following partially completed aging of receivables schedule as of the end of business on December 31, 2011: Not Days Past Due Past Customer Balance Due 31-60 61-90 91-120 Over 120 ABC Beauty 15.000 15,000 Angel Wigs 8,000 8,000 Zodiac Beauty 3,000 Subtotals 875,000 415,000 210,000 112,000 55,000 18,000 65,000 The following accounts were unintentionally omitted from the aging schedule: Customer Due Date Balance 10,000 Arcade Beauty Creative Images 8.500 Excel Hair Products Aug 17, 2011 Oct. 30, 2011 July 3, 2011 Sept. 8, 2011 Nov. 23, 2011 7,500 First Class Hair Care Golden Images 3,600

Answer 1

1. No. of days past due: (Consider the day of due date as well)

1) Arcade Beauty = 137 days (Aug 15 days + Sep 30 days + Oct 31 days + Nov 30 days + Dec 31 days)

2) Creative Images = 63 days (Oct 2 days + Nov 30 days + Dec 31 days)

3) Excel Hair Products = 182 days (Jul 29 days + Aug 31 days + Sept 30 days + Oct 31 days + Nov 30 days + Dec 31 days)

4) First Class Hair Care = 115 days (Sept 23 days + Oct 31 days + Nov 30 days + Dec 31 days)

5) Golden Images = 38 days (Nov 7 days + Dec 31 days)

6) Oh that hair = 33 days (Nov 2 days + Dec 31 days)

7) One Stop Hair Designs = 25 days (Dec 25 days)

8) Visions Hair and Nail = 0 days