The following transactions occurred over the months of September to December at Nicole's Getaway Spa (NGS). October September Sold spa merchandise to Ashley Welch Beauty for $1,850 on account; the cost of these goods to NGS was $920. Sold merchandise to Kelly Fast Nail Gallery for $470 on account; the cost of these goods to NGS was $210. November Sold merchandise to Raea Gooding Wellness for $320 on account; the cost of these goods to NGS was $200. December Received $1,230 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, 3%; two months, 5%, three months, 20%, more than three months, 30%. 3. The Allowance for Doubtful Accounts balance was $48 (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 $810, and net sales for the current year are $9,100. 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 2 Required 3 Required 4 Required 5 Assume the end of the previous year showed net accounts receivable of $810, and net sales for the current year are $9,100. Calculate the accounts receivable turnover ratio. (Do not round intermediate calculations. Round your final answer to 11 decimal place) Accounts Receivable Turnover Ratio Required 11 times < Required 3 Required 5 >
The following transactions occurred over the months of September to December at Nicole's Getaway Spa (NGS). October September Sold spa merchandise to Ashley Welch Beauty for $1,850 on account; the cost of these goods to NGS was $920. Sold merchandise to Kelly Fast Nail Gallery for $470 on account; the cost of these goods to NGS was $210. November Sold merchandise to Raea Gooding Wellness for $320 on account; the cost of these goods to NGS was $200. December Received $1,230 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, 3%; two months, 5%, three months, 20%, more than three months, 30%. 3. The Allowance for Doubtful Accounts balance was $48 (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 $810, and net sales for the current year are $9,100. 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 2 Required 3 Required 4 Required 5 Assume the end of the previous year showed net accounts receivable of $810, and net sales for the current year are $9,100. Calculate the accounts receivable turnover ratio. (Do not round intermediate calculations. Round your final answer to 11 decimal place) Accounts Receivable Turnover Ratio Required 11 times < Required 3 Required 5 >
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text: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 $1,850 on account; the cost of these goods to NGS was $920.
October Sold merchandise to Kelly Fast Nail Gallery for $478 on account; the cost of these goods to NGS was $210.
November Sold merchandise to Raea Gooding Wellness for $320 on account; the cost of these goods to NGS was $200.
December Received $1,230 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, 3%; two months, 5%, three months, 20%; more than three months, 30%.
3. The Allowance for Doubtful Accounts balance was $48 (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 $810, and net sales for the current year are $9,100.
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
Assume the end of the previous year showed net accounts receivable of $810, and net sales for the current year are $9,100.
Calculate the accounts receivable turnover ratio. (Do not round intermediate calculations. Round your final answer to 1
decimal place)
Accounts Receivable Turnover Ratio
times
< Required 3
Required 5 >
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 6 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education