CC8-1 Accounting for Receivables and Uncollectible Accounts [LO 8-2, LO 8-4]
CC8-1 Accounting for Receivables and Uncollectible Accounts [LO 8-2, LO 8-4] The following transactions occurred over the months of September to December at Nicole's Getaway Spa (NGS) September October November December Sold spa merchandise to Ashley Welch Beauty for $1,750 on account, the cost of these goods to NGS was $880 Sold merchandise to Kelly Fast Nail Gallery for $430 on account, the cost of these goods to NGS was $190 Sold merchandise to Raea Gooding Wellness for $280 on account, the cost of these goods to NGS was $180 Received $1,170 from Ashley Welch Beauty for payment on its account. Required Prepare journal entries for each of the transactions. Assume a perpetual inventory system. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Import a new list 1 Record sales revenue of $1,750 on account 2 Record the cost of goods sold of $880 3 Record sales revenue of $430 on account 4 Record the cost of goods sold of $190 5 Record sales revenue of $280 on account. 6 Record the cost of goods sold of $180 7 Record the collection of $1,170 for an outstanding Credit customer account Notejournal entry has been entered Record entry Clear entry View general journal 2. Estimate the Allowance for Doubtful Accounts required at December 31, assuming the only receivables outstanding at December 31 arise from the transactions listed above. NGS uses the aging of accounts receivable method with the following uncollectible rates: one month, 1%; two months. 5%, three months 20%; more than three months, 40% Estimated Uncollectible One Month Two Months Three Months More than Three Months Total 3. The Allowance for Doubtful Accounts balance was $46 (credit) before the end-of-period adjusting entry is made. Prepare the journal entry to account for the Bad Debt Expense. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet Record the adjusting entry for bad debts using the aging of accounts receivable Note: Enter debits before credits Transaction General Journal Debit Credit Record entry Clear entry View general journal 4. Assume the end of the previous year showed net accounts receivable of $790, and net sales for the current year are $8,900. Calculate the accounts receivable turnover ratio. (Do not round intermediate calculations. Round your answer to 1 decimal place.) Accounts Receivable Turnover Ratio times 5. Audrey's Mineral Spa has an accounts receivable turnover ratio of 8.0 times. How does NGS compare to this competitor? Nicole's Getaway Spa is in collecting receivables from customers than its competitor
