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Angler’s Dream Company

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PR 9-2A Aging of receivables; estimating allowance for doubtful accounts
Angler’s Dream Company supplies flies and fishing gear to sporting goods stores and
outfitters throughout the western United States. The accounts receivable clerk for Angler’s
Dream prepared the following partially completed aging of receivables schedule as of the
end of business on December 31, 2011:


The following accounts were unintentionally omitted from the aging schedule:
Customer Due Date Balance
Antelope Sports & Flies June 21, 2011 $ 3,000
Big Hole Flies Aug. 30, 2011 6,500
Charlie’s Fish Co. Sept. 8, 2011 12,000
Deschutes Sports Oct. 20, 2011 4,000
Green River Sports Nov. 7, 2011 3,500
Smith River Co. Nov. 28, 2011 1,500
Wild Trout Company Dec. 5, 2011 5,000
Wolfe Sports Jan. 7, 2012 4,500

Angler’s Dream has a past history of uncollectible accounts by age category, as follows:
Age Class Percent Uncollectible
Not past due 1%
1–30 days past due 4
31–60 days past due 8
61–90 days past due 25
91–120 days past due 45
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 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 Angler’s Dream Company has
a debit balance of $1,405 before adjustment on December 31, 2011. Journalize the
adjusting entry for uncollectible accounts.
5. Assume that the adjusting entry in (4) was inadvertently omitted, how would the omission
affect the balance sheet and income statement?

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