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CC$8-1($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$).$

September Sold spa merchandise to Ashley Welch Beauty for $$2,100$ on account; the cost of these goods to NGS was $$1,020.$

October Sold merchandise to Kelly Fast Nail Gallery for $$570$ on account; the cost of these goods to NGS was $$260.$

November Sold merchandise to Raea Gooding Wellness for $$420$ on account; the cost of these goods to NGS was $$250.$

December Received $$1,380$ 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 $$53($credit$)$ 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 $$860,$ and net sales for the current year are $$9,600.$ 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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