Evergreen Company sells lawn and garden products to wholesalers The companys fiscal year end is December 31 During 2016, the following transactions related to receivables occurred Feb 28 Sold merchandise to Lennox, Inc for $12,000 and accepted a 8 , 7 month note 8 is an appropriate rate for this type of note Mar 31 Sold merchandise to Maddox Co and accepted a noninterest bearing note with a discount rate of 8 The $8,300 payment is due on March 31, 2017 Apr 3 Sold merchandise to Carr Co for $7,300 with terms 3 10, n 30 Evergreen uses the gross method to account for cash discounts 11 Collected the entire amount due from Carr Co 17 A customer returned merchandise costing $3,500 Evergreen reduced the customers receivable balance by $5,300, the sales price of the merchandise Sales returns are recorded by the company as they occur 30 Transferred receivables of $53,000 to a factor without recourse The factor charged Evergreen a 2 finance charge on the receivables transferred The sale criteria are met June 30 Discounted the Lennox, Inc , note at the bank The banks discount rate is 10 The note was discounted without recourse Sep 30 Lennox, Inc , paid the note amount plus interest to the bank Required 1 Prepare the necessary journal entries for Evergreen for each of the above dates For transactions involving the sale of merchandise, ignore the entry for the cost of goods sold (If no entry is required for a transaction event, select No journal entry required in the first account field Do not round intermediate calculations Round your final answers to the nearest whole dollar ) 2 Prepare any necessary adjusting entries at December 31, 2016 Adjusting entries are only recorded at year end (If no entry is required for a transaction event, select No journal entry required in the first account field ) 3 Prepare a schedule showing the effect of the journal entries on 2016 income before taxes (Decreases should be indicated with a minus sign Do not round intermediate calculations Round your final answers to the nearest whole dollar )

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Posted on Sep 14, 2024

Evergreen Company sells lawn and garden products to wholesalers. The companys fiscal year-end is December 31. During 2016, the following transactions related to receivables occurred:

Feb. 28		Sold merchandise to Lennox, Inc. for $12,000 and accepted a 8%, 7-month note. 8% is an appropriate rate for this type of note.
Mar. 31		Sold merchandise to Maddox Co. and accepted a noninterest-bearing note with a discount rate of 8%. The $8,300 payment is due on March 31, 2017.
Apr. 3		Sold merchandise to Carr Co. for $7,300 with terms 3/10, n/30. Evergreen uses the gross method to account for cash discounts.
11		Collected the entire amount due from Carr Co.
17		A customer returned merchandise costing $3,500. Evergreen reduced the customers receivable balance by $5,300, the sales price of the merchandise. Sales returns are recorded by the company as they occur.
30		Transferred receivables of $53,000 to a factor without recourse. The factor charged Evergreen a 2% finance charge on the receivables transferred. The sale criteria are met.
June 30		Discounted the Lennox, Inc., note at the bank. The banks discount rate is 10%. The note was discounted without recourse.
Sep. 30		Lennox, Inc., paid the note amount plus interest to the bank.

Required:

Prepare the necessary journal entries for Evergreen for each of the above dates. For transactions involving the sale of merchandise, ignore the entry for the cost of goods sold. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Round your final answers to the nearest whole dollar.)

Prepare any necessary adjusting entries at December 31, 2016. Adjusting entries are only recorded at year-end. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

3.	Prepare a schedule showing the effect of the journal entries on 2016 income before taxes. (Decreases should be indicated with a minus sign. Do not round intermediate calculations. Round your final answers to the nearest whole dollar.)