Trophy Fish Company supplies flies and fishing gear to sporting goods stores and
ID: 2484150 • Letter: T
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, 2015:
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
20,000.00
20,000.00
5
Brown Trout Fly Shop
7,500.00
7,500.00
6
~~~~~
~~~~~
~~~~~
~~~~~
~~~~~
~~~~~
~~~~~
~~~~~
7
8
Zigs Fish Adventures
4,000.00
4,000.00
9
Subtotals
1,300,000.00
750,000.00
290,000.00
120,000.00
40,000.00
20,000.00
80,000.00
The following accounts were unintentionally omitted from the aging schedule:
Trophy Fish has a past history of uncollectible accounts by age category, as follows:
Chart of Accounts
Starting Question
1. Determine the number of days past due for each of the preceding accounts. If an account is not past due, enter a zero.
Aging of Receivables Schedule
2. Complete the aging of receivables schedule by adding the omitted accounts to the bottom of the schedule and updating the totals. If an amount box does not require an entry, leave it blank.
Aging of Receivables Schedule
December 31, 2015
1
Days Past Due
Days Past Due
Days Past Due
Days Past Due
Days Past Due
2
Customer
Balance
Not Past Due
1-30
31-60
61-90
91-120
Over 120
3
AAA Outfitters
20,000.00
20,000.00
4
Brown Trout Fly Shop
7,500.00
7,500.00
5
~~~~~
~~~~~
~~~~~
~~~~~
~~~~~
~~~~~
~~~~~
~~~~~
6
Zigs Fish Adventures
4,000.00
4,000.00
7
Subtotals
1,300,000.00
750,000.00
290,000.00
120,000.00
40,000.00
20,000.00
80,000.00
8
Adams Sports & Flies
9
Blue Dun Flies
10
Cicada Fish Co.
11
Deschutes Sports
12
Green River Sports
13
Smith River Co.
14
Western Trout Company
15
Wolfe Sports
16
Totals
17
Percentage uncollectible
18
Estimate of uncollectible accounts
Additional Question
3. Estimate the allowance for doubtful accounts, based on the aging of receivables schedule.
$
Journal
4. Assume that the allowance for doubtful accounts for Trophy Fish Company has a debit balance of $3,600 before adjustment on December 31, 2015. Journalize the adjusting entry for uncollectible accounts. Refer to the chart of accounts for a listing of the account titles the company uses.
PAGE 10
JOURNAL
1
2
Final Question Tab
5. Assume that the adjusting entry in (4) was inadvertently omitted, how would the omission affect the balance sheet and income statement?
On the balance sheet, assets would be by because the allowance for doubtful accounts would be by . In addition, the owner’s capital account would be by because bad debt expense would be and net income by on the income statement.
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
20,000.00
20,000.00
5
Brown Trout Fly Shop
7,500.00
7,500.00
6
~~~~~
~~~~~
~~~~~
~~~~~
~~~~~
~~~~~
~~~~~
~~~~~
7
8
Zigs Fish Adventures
4,000.00
4,000.00
9
Subtotals
1,300,000.00
750,000.00
290,000.00
120,000.00
40,000.00
20,000.00
80,000.00
Explanation / Answer
1. Number of days past due for each of the preceding accounts. Customer Due Date Number of Days Past Due Adams Sports & Flies 22-May-15 223 days Blue Dun Flies Oct. 10, 2015 82 days Cicada Fish Co. Sept. 29, 2015 93 days Deschutes Sports Oct. 20, 2015 72 days Green River Sports Nov. 7, 2015 54 days Smith River Co. Nov. 28, 2015 33 days Western Trout Company Dec. 7, 2015 24 days Wolfe Sports Jan. 20, 2016 0 days 2. Completed aging schedule of receivables. Aging of Receivables Schedule 31-Dec-15 1 Days Past Due Days Past Due Days Past Due Days Past Due Days Past Due 2 Customer Balance Not Past Due 01--30 31-60 61-90 91-120 Over 120 3 AAA Outfitters 20,000.00 20,000.00 4 Brown Trout Fly Shop 7,500.00 7,500.00 5 ~~~~~ ~~~~~ ~~~~~ ~~~~~ ~~~~~ ~~~~~ ~~~~~ ~~~~~ 6 Zigs Fish Adventures 4,000.00 4,000.00 7 Subtotals 1,300,000.00 750,000.00 290,000.00 120,000.00 40,000.00 20,000.00 80,000.00 8 Adams Sports & Flies 5,000.00 5,000.00 9 Blue Dun Flies 4,900.00 4,900.00 10 Cicada Fish Co. 8,400.00 8,400.00 11 Deschutes Sports 7,000.00 7,000.00 12 Green River Sports 3,500.00 3,500.00 13 Smith River Co. 2,400.00 2,400.00 14 Western Trout Company 6,800.00 6,800.00 15 Wolfe Sports 4,400.00 4,400.00 16 Totals 1,342,400.00 754,400.00 296,800.00 125,900.00 51,900.00 28,400.00 85,000.00 17 Percentage uncollectible 1 2 10 30 40 80 18 Estimate of uncollectible accounts 7544.00 5936.00 12590.00 15570.00 11360.00 68000.00 121000.00 3. Estimate of allowance for doubtful debts based on the ageing schedule = 121000.00 4. Journal entries DATE DESCRIPTION POST. REF. DEBIT CREDIT 1 Dec, 31,2015 Bad Debts Expense 124,600.00 Allowance for doubtful debts 124,600.00 5. Effect on the Balance sheet and income statement if, the above entry is omitted: On the balance sheet, assets would be over stated by $ 124,600 because the allowance for doubtful accounts would be understated by $124,600. In addition, the owner’s capital account would be overstated by $ 124,600 because bad debt expense would be understated by $ 124,600 and net income overstated by $ 124,600 on the income statement.
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.