Cutthroat Company supplies flies and fishing gear to sporting goods stores and outfitters throughout the western United States. The accounts receivable clerk for Cutthroat prepared the following partially completed aging of receivables schedule as of the end of business on December 31, 2009:
The following accounts were unintentionally omitted from the aging schedule:
Customer Due Date Balance
AAA Sports & Flies June 14, 2009 $2,850
Blackmon Flies Aug. 30, 2009 1,200
Charlie’s Fish Co. Sept. 30, 2009 1,800
Firehole Sports Oct. 17, 2009 600
Green River Sports Nov. 7, 2009 950
Smith River Co. Nov. 28, 2009 2,200
Wintson Company Dec. 1, 2009 2,250
Wolfe Bug Sports Jan. 6, 2010 6,550
Cutthroat Company has a past history of uncollectible accounts by age category, as follows:
Age Class Percent Uncollectible
Not past due 2%
1–30 days past due 5
31–60 days past due 10
61–90 days past due 25
91–120 days past due 45
Over 120 days past due 90
Instructions
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 Cutthroat Company has a debit balance of $1,370 before adjustment on December 31, 2009. Journalize the adjusting entry for uncollectibleaccounts.