Bowerston Variety Store had the following balances as of November 1:

Accounts Receivable ............................................. $5,100
Allowance for Uncollectible Accounts ................... $360

The following selected transactions occurred at Bowerston Variety Store during the month of November:

Requirements

1. Record Bowerston’s November transactions, including the cost of goods sold entries for each sale.

2. Calculate the net realizable value of accounts receivable as of November 30.

Transcribed Image Text:

November Sold $300 of merchandise to Martino's Inc., which paid for the items in cash. The items cost Bowerston $120. 3 November Sold $600 of merchandise to Liberty Co., which paid by credit card. The credit card company charges Bowerston a fee of 2% on credit card sales. Bowerston's cost of this merchandise was $245. November Sold $1,300 of merchandise to Willow Creek on account. Terms were 2/10, net 30. Bowerston's cost of this merchandise was $500. 10 November Sold $2,000 of merchandise to Amherst Shoppes on account. Terms were 2/10, net 30. Bowerston's cost of this merchandise was $900. 11 November Sold $900 of merchandise to Black River Inc., on account. Terms were 2/10, net 30. Bowerston's cost of this merchandise was $387. 12 November Willow Creek reported that some of the merchandise received was in a different color than ordered so it returned $150 of the merchandise. The cost to 18 SO Bowerston was $58. November Amherst Shoppes paid the balance of what it owed for the purchase on November 11. 20 November Black River Inc., returned $200 of the merchandise for a refund. Bowerston's cost of the returned merchandise was $86. 22 November Black River Inc., paid the remaining balance owed for the purchase on November 12. 22 November Sold $5,000 of merchandise to Charleston Co. on account. Terms were 2/10, net 30. Bowerston's cost of this merchandise was $2,000. Willow Creek paid the balance of what it owed for the purchase on November 10. 23 November 25 November Discovered that Etna Enterprises, a customer owing $150 from a July transaction, declared bankruptcy and there is no chance of collection. Wrote off the balance of Etna's account. 26 November Sold $700 of merchandise to Denis's One-Stop-Shop on account. Terms were 2/10, net 30. Bowerston's cost of this merchandise was $245. Sales on account during the month of November for transactions not listed individually totaled $7,200. Cost of goods sold for these sales totaled $3,000. Credit card sales on account during the month of November for transactions not listed individually totaled $2,500. The credit card company charges Bowerston a fee of 2% on credit card sales. Cost of goods sold for these sales 27 November 1-30 November 1-30 totaled $900. November 1-30 Cash collections on account during the month of November for transactions not listed individually totaled $4,500. (No discounts were taken by these customers.) Bowerston made the adjusting entries for the month to accrue for estimated future returns. Bowerston estimates that 5% of total sales will be returned. Bowerston November 30 assumes that cost of goods sold is 40% of sales. Bowerston made an adjusting entry to estimate uncollectible account expense for the month of November. Bowerston estimates its uncollectible-account expense as 1% of total credit (on account) sales for the month. November 30