Looks Good Wigs Company supplies wigs and hair care products to beauty salons throughout California and the
Question:
The following accounts were unintentionally omitted from the aging schedule:
Looks Good Wigs has a past history of uncollectible accounts by age category, as follows:
Percent
Age Class Uncollectible
Not past due ......... 2%
130 days past due ....... 4
3160 days past due ...... 10
6190 days past due ...... 15
91120 days past due ....... 35
Over 120 days past due ..... 80
Instructions
1. Determine the number of days past due for each of the preceding accounts.
2. Complete the aging-of-receivables schedule.
3. Estimate the allowance for doubtful accounts, based on the aging-of-receivables schedule.
4. Assume that the allowance for doubtful accounts for Looks Good Wigs has a credit balance of $9,550 before adjustment on December 31, 2007. Journalize the adjustment for uncollectibleaccounts.
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
Step by Step Answer:
Accounting
ISBN: 978-0324401844
22nd Edition
Authors: Carl S. Warren, James M. Reeve, Jonathan E. Duchac