Aging of receivables; Estimating Allowance for Doubtful Accounts Trophy Fish Com
ID: 2424474 • Letter: A
Question
Aging of receivables; Estimating Allowance for Doubtful Accounts
Trophy Fish Company spplies 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 receivable schudle as of the end of business on December 31, 2013:
Draft:
A B C D E F G H
1. Not Days Past Due
2. Pass
3.Customer Balance Due 1-30 31-60 61-90 91-120 Over120
4.AAA Outfitters 20,000 20,000
5. Brown Trout Fly Shop 7,500 7,500
30 Zigs Fish Adventures 4,000 4,000
31.Subtotals 1300,000 750,000 290,000 120,000 40,000 20,000 80,000
The following accounts were unintentionally omitted from the aging schedule:
Customer Due Date Balance
Adams Sports &Flies May 22, 2013 5000
Blue Dun Flies Oct 10, 2013 4,900
Cicada Fish Co. Sep.29,2013 8,400
Deschutes Sports Oct. 20,2013 7,000
Green River Sports Nov.7,2013 3,500
Smith River Co. Nov. 28,2013 2,400
Western Trout Company Dec. 7,2013 6,800
Wolfe Sports Jan.20,2014 4,400
Trophy Fish has a past history of uncollectible account by age category, as following:
Age Class Percent Uncollectible
Not past due 1%
1-30 days past due 2%
31-60 days past due 10%
61-90 days past due 30%
91-120 days past due 40%
Over 120 days past due 80%
Required:
1. Determine the number of days past due for each of the preceding accounts. If an account is not past due, enter a zero
Customer Due Date Number of Days Past Due
Adams Sports & Flies May 22,2013 ___________ days.
Blue Sports Flies Oct.10,2013 ___________days
Cicada Fish Co. Sept.29,2013 ___________days
Deschutes Sports Oct.20,2013 ___________days
Green River Sports Nov. 7,2013 ___________days
Smith River Co. Nov. 28,2013 ____________days
Western Trout Company Dec. 7,2013 ____________days
Wolfe Sports Jan. 20,2014 ____________days
2.Complete the aging of receivables schedule by adding the omitted accounts to the bottom of the schedule and updating the totals
(Draft) Trophy Fish Company
Aging of Receivable Schedule
December 31,2013
customer Balance Not Past Due D-Pdue1-30 D-Pdue 31-60 D-Pdue 61-90 D-Pdue91-120 DPdue over 120
AAA Outfitters 20,000 20,000 _____ ________ _______ ______ ______
Brown Trout Fly Shop 7,500 _________ _______ 7500
Zigs Fish Adventures 4,000 ________ 4,000
Subtotals _______ __________ __________ ___________ _________ ______ _______
1.Adams Sports and Flies ____ _______ ________ __________ _______ __________ _________
2.Blue Dun Flies ________ ________ ________ _________ ________ _______ _________
3.Cicada Fish Co. ________ _________ ________ _________ _________ __________ ______
4.Deschutes Sports
5.Green River Sports
6.Smith River Co.
7. Western Trout Company
8. Wolfe Sports
Totals ________ __________ _____________ ___________ ___________ _________ _________
Percentage uncollectible (%) _______ 1________% 2_______% 10______% 30_______% 40______% 80______%
Estimate of uncollectible accounts $________ $______ $________ $_______ $_______ $_________ $_______
3. Estimate the allowance for doubtful accounts, based on the aging of receivables schedule. $___________.
$. Assume that the allowance for doudtful accounts for Trophy Fish Company has a debt balance of 3,600 before adjustment on December 31,2013. Journalize the entry for uncollectable accounts.
(chart) ________________ _______________
________________ ______________
Explanation / Answer
Ageing receivable schedule is as follows:
Allowance for doubtful doubts-$105,700
4 Assume that the allowance for doubtful accounts for Trophy Fish Company has a debt balance of 3,600 before adjustment on December 31, 2013
Total allowance=3,600+105,700
=$109,300
Entry would be
Bad debts expenses a/c Dr. $109,300
To Allowance for doubtful doubts $109,300
Customer Due Date Closign date Number of Days Past Due(Due date-closing date Adams Sports & Flies 22-May-13 31-Dec-13 223 Blue Dun Flies Oct. 10, 2013 31-Dec-13 82 Cicada Fish Co. Sept. 29, 2013 31-Dec-13 93 Deschutes Sports Oct. 20, 2013 31-Dec-13 72 Green River Sports Nov. 7, 2013 31-Dec-13 54 Smith River Co. Nov. 28, 2013 31-Dec-13 33 Western Trout Company Dec. 7, 2013 31-Dec-13 24 Wolfe Sports Jan. 20, 2014 31-Dec-13 0