Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

CC8-1 (Algo) 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

image text in transcribed
image text in transcribed
CC8-1 (Algo) 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). Septeaber sold spa nerchandise to Ashley Welch Beauty for $2,100 on account; the cost of these goods to wGs vas october $1,020. November Sold merchandise to Kelly Fast Mail Gallery for $570 on account; the cost of these goods to wGs was $260. December Received $1,380 tron Ashley Welch Beauty for payment on its account. Required: 1. Prepare journal entries for each of the transactions. Assume a perpetual inventory system. 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, 2\%; two months, 5%; three months, 20\%; more than three months, 35%. 3. The Allowance for Doubtful Accounts balance was $53 (credit) before the end-of-period adjusting entry is made. Prepare the journal entry to account for the Bad Debt Expense. 4. Assume the end of the previous year showed net accounts receivible of $860, and net sales for the current year are $9,600. Calculate the accounts recelvable turnover ratio. 5. Audrey's Mineral Spa has an accounts recelvable turnover ratio of 12.0 times. How does NGS compare to this competitor? Complete this question by entering your answers in the tabs below. 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 recelvable method with the following uncollectible rates: one month, 2%; two months, 5%; three months, 20%; more than three months, 35%

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Practical Steps To Forensic Auditing And Fraud Investigation

Authors: Enape Victoria Ayishetu

1st Edition

1669867048, 978-1669867043

More Books

Students also viewed these Accounting questions