+1-415-670-9189
info@expertsmind.com
Prepare the necessary journal entries
Course:- Taxation
Reference No.:- EM13298421




Assignment Help
Expertsmind Rated 4.9 / 5 based on 47215 reviews.
Review Site
Assignment Help >> Taxation

Evergreen Company sell lawn and gardenproducts to wholesalers. The company's fiscal year-end is December31. During 2006, the following transactions related to receivablesoccurred:Feb. 28 Sold merchandise to Lennox, Inc. for $10,000 andaccepted a 10%, 7 month note. 10% is an appropriate rate for thistype of note.Mar. 31 Sold merchandise to Maddox Co. and accepted anoninterest-bearing note with a discount rate of 10%. The $8,000payment is due on March 31,2007.Apr. 3 Sold merchandise to Carr Co. for $7,000 withterms 2/10, n/30. Evergreen uses the gross method to account forcash discounts.Apr. 11 Collected the entire amount due from CarrCo.Apr. 17 A customer returned merchandise costing $3,200.Evergreen reduced the customer's receivable balance by $5,000, thesales price of the merchandise. Sales returns are recorded by thecompany as they occur.Apr. 30 Transferred receivables of $50,000 to a factorwithout recourse. The factor charged Evergreen a 1% finance chargeon the receivables transferred. The sale criteria are met.June 30 Discounted the Lennox, Inc., note at the bank,The bank's discount rate is 12%. The note was discounted withoutrecourse.Aug. 31 Lennox, Inc,. paid the note amount plus interestto the bank.Required:

1. Prepare the necessary journal entries for Evergreen foreach of the above dates. For transactions involving the sale ofmerchandise, ignore the entry for the cost of goods sold (round allcalculations to the nearest dollar).

2. Prepare any necessary adjusting entries at December31,2006. Adjusting entries are only recorded at year-end (round allcalculations to the nearest dollar).

3. Prepare a schedule showing the effect of the journalentries in requirements 1 and 2 on 2006 income before taxes.




Put your comment
 
Minimize


Ask Question & Get Answers from Experts
Browse some more (Taxation) Materials
During the year, Emma purchased a bathtub manufactured by Periwinkle for $1300. The bathtub only cost Periwinkle $700 to manufacture and is sold to the general public for $2
Describe the three different tax rates discussed and how taxpayers might use them. Which is a more appropriate tax rate to use to compare taxpayers' tax burdens- the average
Falcon Corporation has $200,000 of current E & P and a deficit in accumulated E & P of $90,000. If Swan pays a $300,000 distribution to its shareholders on July 1, how much
1. How do monetary policy actions made by the Federal Reserve impact interest rates? 2. What is the repricing gap? In using this model to evaluate interest rate risk, what is
The Big Bang Company was set up by Ed, an Australian resident. It is incorporated in Singapore and has two directors who are resident in Singapore and who hold board meeting
Discuss whether or not you think that an income tax system that uses a flat tax rather than a progressive tax will mean a fairer and more equitable tax system for all taxpay
For interim financial reporting for domestic subsidiaries, what categories may be accrued or deferred to provide an appropriate use of the basic matching concept accounting
Analyze the impact of tax holidays of up to 10 days in your state. Create a table with two (columns. The first column should list Yield, Equity, Administration and Complianc