The following transactions occurred over the months of September to December at Nicoles Getaway Spa (NGS).

September	Sold spa merchandise to Ashley Welch Beauty for $1,750 on account; the cost of these goods to NGS was $880.
October	Sold merchandise to Kelly Fast Nail Gallery for $430 on account; the cost of these goods to NGS was $190.
November	Sold merchandise to Raea Gooding Wellness for $280 on account; the cost of these goods to NGS was $180.
December	Received $1,170 from 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, 1%; two months, 5%; three months, 20%; more than three months, 40%.
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.
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.
5. Audreys Mineral Spa has an accounts receivable turnover ratio of 8.0 times. How does NGS compare to this competitor?

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.)

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 customer account.

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	$0

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.)

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
a.

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 final answer to 1 decimal place)

Accounts Receivable Turnover Ratio

times

Audreys Mineral Spa has an accounts receivable turnover ratio of 8.0 times. How does NGS compare to this competitor?

Nicoles Getaway Spa is

in collecting receivables from customers than its competitor.