During its first year of operations, Wendy Company had credit sales of \(\$ 3,000,000\), of which \(\$ 600,000\) remained uncollected at year-end. The credit manager estimates that \(\$ 40,000\) of these receivables will become uncollectible.

(a) Prepare the journal entry to record the estimated uncollectibles.

(b) Prepare the current asset section of the balance sheet for Wendy Company, assuming that in addition to the receivables it has cash of \(\$ 90,000\), merchandise inventory of \(\$ 130,000\), and prepaid expenses of \(\$ 13,000\).

(c) Calculate the credit risk ratio, receivables turnover ratio, and average collection period. Assume net receivables 1 year before were \(\$ 500,000\).