Problem $7-10($Algo$)$ Miscellaneous receivable transactions; financial statement effects $[$LO$7-3,7-4,7-7,$

$7-8]$

Evergreen Company sells lawn and garden products to wholesalers. The company's fiscal year$-$end is December $31.$ During $2024,$ the

following transactions related to receivables occurred:

February $28$ Sold merchandise to Lennox, Incorporated, for $$30,000$ and accepted a $8\%,7-$month note. $8\%$ is an appropriate rate for this type of note.

March $31$ Sold merchandise to Maddox Company that had a fair value of $$20,240,$ and accepted a noninterest$-$bearing note for which $$22,000$ payment

is due on March $31,2025.$

April $3$ Sold merchandise to Carr Company for $$20,000$ with terms $\frac{2}{10}.\frac{n}{30}.$ Evergreen uses the gross method to account for cash discounts.

April $11$ Collected the entire amount due from Carr Company

April $17$ A customer returned merchandise costing $$4,300.$ Evergreen reduced the customer's receivable balance by $$6,100,$ the sales price of the

merchandise. Sales returns are recorded by the company as they occur.

April $30$ Transferred receivables of $$61,000$ to a factor without recourse. The factor charged Evergreen a $1\%$ finance charge on the receivables

transferred. The sale criteria are met.

June $30$ Discounted the Lennox, Incorporated, note at the bank. The bank's discount rate is $10\%.$ The note was discounted without recourse.

September $30$ Lennox, Incorporated, 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.

Prepare any necessary adjusting entries at December $31,2024.$ Adjusting entries are only recorded at year$-$end.

Prepare a schedule showing the effect of the journal entries on $2024$ income before taxes.