CC$8-1($Static$)$ 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 Sold spa merchandise to Ashley Welch Beauty for $$1,800$ on account; the cost of these goods to NGS was $$900.$

October Sold merchandise to Kelly Fast Nail Gallery for $$450$ on account; the cost of these goods to NGS was $$200.$

November Sold merchandise to Raea Gooding Wellness for $$300$ on account; the cost of these goods to NGS was $$190.$

December Received $$1,200$ from Ashley Welch Beauty for payment on its account.

Required:

Prepare journal entries for each of the transactions. Assume a perpetual inventory system.

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, $35\%.$

The Allowance for Doubtful Accounts balance was $$47($credit$)$ before the end$-$of$-$period adjusting entry is made. Prepare the journal entry to account for the Bad Debt Expense.

Assume the end of the previous year showed net accounts receivable of $$800,$ and net sales for the current year are $$9,000.$ Calculate the accounts receivable turnover ratio.

Audrey's Mineral Spa has an accounts receivable turnover ratio of $12\mathrm{.}0$ times. How does NGS compare to this competitor?

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