Financial & Managerial Accounting
13th Edition
ISBN: 9781285866307
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Chapter 8, Problem 8.2BPR
(1)
To determine
Accounts receivable
Accounts receivable refers to the amounts to be received within a short period from customers upon the sale of goods and services on account. In other words, accounts receivable are amounts customers owe to the business. Accounts receivable is an asset of a business.
Due date:
Due date is the maturity date on note/account, on due date the borrower is supposed to pay the debt.
Past due:
Past due is the number of days of not receiving/making payment on the overdue account.
Analysis of receivables method:
A method of determining the estimated uncollectible receivables based on the age of individual accounts receivable is known as analysis of receivables method. This method is otherwise known as aging of receivables method. Under analysis of receivables method, estimated
The number of days each account is past due as of December 31, 2015.
(2)
To determine
To complete: The aging of receivables schedule, by adding the omitted accounts to the bottom of the schedule and update the totals.
(3)
To determine
To prepare: An estimate for allowance for doubtful accounts, on the basis of aging of receivables schedule.
(4)
To determine
To Journalize: The
(5)
To determine
To identify: The effect on the balance sheet and income statement, if adjusting entry is omitted unintentionally.
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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, 20Y7:
Not
Days Past Due
Past
Customer
Balance
Due
1-30
31-60
61-90
91-120
Over 120
ABC Beauty
19,100
19,100
Angel Wigs
7,700
7,700
Zodiac Beauty
4,500
4,500
Subtotals
1,294,300
742,000
297,300
121,100
42,400
16,100
75,400
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
$5,300
Creative Images
Oct. 30
5,200
Excel Hair Products…
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, 20Y7:
Not
Days Past Due
Past
Customer
Balance
Due
1-30
31-60
61-90
91-120
Over 120
ABC Beauty
21,000
21,000
Angel Wigs
7,600
7,600
Zodiac Beauty
3,500
3,500
Subtotals
1,305,100
746,400
294,000
125,900
43,800
16,400
78,600
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
$4,500
Creative Images
Oct. 30
4,900
Excel Hair Products…
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, 20Y1:
Not
Days Past Due
Past
Over
Customer
Balance
Due
1-30
31-60
61-90
91-120
120
ABC Beauty
15,000
15,000
Angel Wigs
8,000
8,000
Zodiac Beauty
3,000
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
Arcade Beauty
Aug. 17, 20Y1
$10,000
Creative Images
Oct. 30, 20Y1
8,500
Excel Hair Products
July 3, 20Y1
7,500
First Class Hair Care
Sept. 8, 20Y1
6,600
Golden Images
Nov. 23, 20Y1…
Chapter 8 Solutions
Financial & Managerial Accounting
Ch. 8 - What are the three classifications of receivables?Ch. 8 - Dans Hardware is a small hardware store in the...Ch. 8 - What kind of an account (asset, liability, etc.)...Ch. 8 - After the accounts are adjusted and closed at the...Ch. 8 - A firm has consistently adjusted its allowance...Ch. 8 - Which of the two methods of estimating...Ch. 8 - Neptune Company issued a note receivable to...Ch. 8 - Prob. 8DQCh. 8 - The maker of a 240,000, 6%, 90-day note receivable...Ch. 8 - The note receivable dishonored in Discussion...
Ch. 8 - Prob. 8.1APECh. 8 - Prob. 8.1BPECh. 8 - Prob. 8.2APECh. 8 - Prob. 8.2BPECh. 8 - Prob. 8.3APECh. 8 - Prob. 8.3BPECh. 8 - Analysis of receivables method At the end of the...Ch. 8 - Prob. 8.4BPECh. 8 - Prob. 8.5APECh. 8 - Note receivable Prefix Supply Company received a...Ch. 8 - Prob. 8.6APECh. 8 - Prob. 8.6BPECh. 8 - Classifications of receivables Boeing is one of...Ch. 8 - Prob. 8.2EXCh. 8 - Entries for uncollectible accounts, using direct...Ch. 8 - Prob. 8.4EXCh. 8 - Prob. 8.5EXCh. 8 - Prob. 8.6EXCh. 8 - Number of days past due Toot Auto Supply...Ch. 8 - Aging of receivables schedule The accounts...Ch. 8 - Estimating allowance for doubtful accounts Waddell...Ch. 8 - Prob. 8.10EXCh. 8 - Prob. 8.11EXCh. 8 - Prob. 8.12EXCh. 8 - Entries for bad debt expense under the direct...Ch. 8 - Entries for bad debt expense under the direct...Ch. 8 - Prob. 8.15EXCh. 8 - Effect of doubtful accounts on net income Using...Ch. 8 - Prob. 8.17EXCh. 8 - Prob. 8.18EXCh. 8 - Prob. 8.19EXCh. 8 - Prob. 8.20EXCh. 8 - Entries for notes receivable The series of seven...Ch. 8 - Prob. 8.22EXCh. 8 - Entries for receipt and dishonor of note...Ch. 8 - Prob. 8.24EXCh. 8 - Prob. 8.25EXCh. 8 - Accounts receivable turnover and days' sales in...Ch. 8 - Prob. 8.27EXCh. 8 - Accounts receivable turnover and days' sales in...Ch. 8 - Prob. 8.29EXCh. 8 - Allowance method entries The following...Ch. 8 - Aging of receivables; estimating allowance for...Ch. 8 - Compare two methods of accounting for...Ch. 8 - Prob. 8.4APRCh. 8 - Notes receivable entries The following data relate...Ch. 8 - Sales and notes receivable transactions The...Ch. 8 - Allowance method entries The following...Ch. 8 - Prob. 8.2BPRCh. 8 - Compare two methods of accounting for...Ch. 8 - Prob. 8.4BPRCh. 8 - Notes receivable entries The following data relate...Ch. 8 - Sales and notes receivable transactions The...Ch. 8 - Ethics and professional conduct in, business Bev...Ch. 8 - Prob. 8.2CPCh. 8 - Prob. 8.3CPCh. 8 - Prob. 8.4CPCh. 8 - Prob. 8.5CP
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- 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, 20Y1: The following accounts were unintentionally omitted from the aging schedule: Wig Creations has a past history of uncollectible accounts by age category, as follows: Instructions 1. Determine the number of days past due for each of the preceding 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 receivables schedule. 4. Assume that the allowance for doubtful accounts for Wig Creations has a credit balance of 7,375 before adjustment on December 31, 20Y1. Journalize the adjustment for uncollectible accounts. 5. Assuming that the adjusting entry in (4) was inadvertently omitted, how would the omission affect the balance sheet and income statement?arrow_forwardAging 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, 20Y1: Days Past Due Customer Balance Not Past Due 1-30 31-60 61-90 91-120 over 120 Subtotals 646,600 358,900 155,200 71,100 23,900 21,300 16,200 The following accounts were unintentionally omitted from the aging schedule: Customer Due Date Balance Arcade Beauty May 28, 20Y1 $3,000 Creative Images Sept. 7, 20Y1 6,200 Excel Hair Products Oct. 17, 20Y1 800 First Class Hair Care Oct. 24, 20Y1 2,100 Golden Images Nov. 23, 20Y1 700 Oh The Hair Nov. 29, 20Y1 3,600 One Stop Hair Designs Dec. 2, 20Y1 2,300 Visions Hair and Nail Jan. 5, 20Y2 7,600 Wig Creations has a past history of…arrow_forwardAging 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, 20Y1: Days Past Due Customer Balance Not Past Due 1-30 31-60 61-90 91-120 Over 120 Subtotals 577,500 320,500 138,600 63,500 21,400 19,100 14,400 The following accounts were unintentionally omitted from the aging schedule: Customer Due Date Balance Arcade Beauty May 28, 20Y1 $2,700 Creative Images Sept. 7, 20Y1 5,700 Excel Hair Products Oct. 17, 20Y1 800 First Class Hair Care Oct. 24, 20Y1 1,900 Golden Images Nov. 23, 20Y1 600 Oh That Hair Nov. 29, 20Y1 3,200 One Stop Hair Designs Dec. 2, 20Y1 2,100 Visions Hair & Nail Jan. 5, 20Y2 6,900 Wig Creations has a past history of…arrow_forward
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