The following transactions occurred over the months of September to December at Nicoles Getaway Spa (NGS).
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 $2,200 on account; the cost of these goods to NGS was $1,060. Sold merchandise to Kelly Fast Nail Gallery for $610 on account; the cost of these goods to NGS was $280. Sold merchandise to Raea Gooding Wellness for $460 on account; the cost of these goods to NGS was $270. Received $1,440 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 $55 (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 $880, and net sales for the current year are $9,800. Calculate the accounts receivable turnover ratio. 5. Audrey's Mineral Spa has an accounts receivable turnover ratio of 12.0 times. How does NGS compare to this competitor? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 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 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. Record entry Clear entry View general Journal Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Assume the end of the previous year showed net accounts receivable of $880, and net sales for the current year are $9,800. Calculate the accounts receivable turnover ratio. (Do not round intermediate calculations. Round your final answer to 1 decimal place) Accounts Receivable Turnover Ratio times Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Audrey's Mineral Spa has an accounts receivable turnover ratio of 12.0 times. How does NGS compare to this competitor? Nicole's Getaway Spa is in collecting receivables from customers than its competitor.
