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E8-13 Record bad debts, prepare partial balance sheet, and calculate ratios. (LO 2, 4) AP At December 31, 2017, Nicholay Industries reports the following selected accounts from the unadjusted trial balance for its first year of operations: Account Debit Credit Accounts receivable $ 700,000 Accounts payable $ 350,000 Cash 40,000 1,750,000 Cost of goods sold Interest receivable 1,125 Interest revenue 2,250 325,000 Merchandise inventory Notes receivable, due April 10, 2018 45,000 Prepaid insurance 8,000 Short-term investments 50,000 Sales 4,000,000 Sales returns and allowances 100,000 Unearned revenue 25,000 Instructions (a) Prepare the journal entry to record the bad debt expense on December 31, 2017, assuming the credit manager estimates that 4% of the accounts receivable will become uncollectible. (b) Prepare the current assets section of the balance sheet for Nicholay Industries on December 31, 2017. (c) Calculate the receivables turnover and collection period. (Remember that this is the end of the first year of business.)