Question

Thanks for helping with this accounting problem!

please answer all three requirements.

Thank you!

Evergreen Company sells lawn and garden products to wholesalers. The company's fiscal year-end is December 31. During 2021, the following transactions related to receivables occurred: salen hout recome . Feb. 28 Sold merchandise to Lennox, Inc. for $18,000 and accepted a 88, 7-month note. 88 18 an appropriate rate for this type of note. Mar. 31 Sold merchandise to Maddox Co. that had a fair value of $11,960, and accepted a noninterest-bearing note for which $13,000 payment is due on March 31, 2022. Apr. 3 Sold merchandise to Carr Co. for $11,000 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 $4,900. Evergreen reduced the customer's receivable balance by $6,700, the sales price of the merchandise. Sales returns are recorded by the company as they occur. 30 Transferred receivables of $67,000 to a factor without recourse. The factor charged Evergreen a 28 finance charge on the receivables transferred. The sale criteria are met. June 30 Discounted the Lennox, Inc., note at the bank. The bank'a discount rate is 100. 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. 2. Prepare any necessary adjusting entries at December 31, 2021. Adjusting entries are only recorded at year-end. 3. Prepare a schedule showing the effect of the journal entries on 2021 income before taxes. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3

Answer 1

solution 1 Preparation of Journal entries for ever green company Debit credit Date Feb-a8 18,000 Account's title and explanation Notes Receivable sales Revenue (To Record sale of merchandise) 18.000 louo 11,960 11,000 man-31 Noted Receivable 13,000 discount sal Revenue (To Record sale of merchandise) Apr-3 Account's receivable 1100D sales revenue (To Record sale of merchandire) AR-10 Calh (1,000x94%) 10,670 sales discount (114000 K3%) 330 Accout receivable (To Record collection from com Co.) Abo-17 sales returns 6,700 Account Receivable (To Recand sales returns) 11,000 6.700

AB-17 4,900 4,900 Inventary cost of goods sold (To Recand cost of goods sold returned) AR-30 cash LOSS on sale of receivable 65,660 1340 Account receivable 67,000 ( To Recand Transfered receivable) 480 June-30 Interest receivable Onterest revenue (18,000 X 8%.X4) (To Record Interest revenue) 480 June 30 cash 18,369 Lossm sale of Note Receivable 1 Interest Receivable Note receivable (To Record settlement of note) 480 18.000

working Note: 1 computation of cash received 18,000 840 face value Interest for months at 8% (18,600 x87x7) lessi Discount on 10%.on (18,QUOX 10%x2) 18,840 (441) 18,369 2 Preparation of Adjusting entry on 31-December 2891 Date Account title and explanation Debit redit Dec-31 480 78 Discount Interest revenue -Cloux a (To Reseand Interest recenue)

③ Preparation of Schedule showing the effect of the Journal entries on 2021 Income before taves Date Income increase / (Decrease) Feb-28 18,000 11,960 mar-31 Apr-03 APO-1 AB-17 11,000 (330) (6,700) 4.900 (1340) 480 AB-17 AB- 30 June-30 June 30 Dec-31 780 Total effect - 38,639
hi...I tried my level best..if you have any doubt please comment me...thank you