FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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- 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: Feb. 28 Sold merchandise to Lennox, Inc., for $20,000 and accepted a 6%, 7-month note. 6% is an appropriate rate for this type of note. Mar. 31 Sold merchandise to Maddox Co. that had a fair value of $15,040, and accepted a noninterest-bearing note for which $16,000 payment is due on March 31, 2022. Apr. 3 Sold merchandise to Carr Co. for $14,000 with terms 2/10, 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 $4,800. Evergreen reduced the customer’s receivable balance by $6,600, the sales price of the merchandise. Sales returns are recorded by the company as they occur. 30 Transferred receivables of $66,000 to a factor without recourse. The…arrow_forwardListed below are selected transactions of Ben’s HomeGoods Store for the current year ending December 31, 2022. a) During December, credit card sales totaled $675,000, which includes the 8% sales tax that must be remitted to the state by the fifteenth day of the following month. (At time of sale, the total amount is recorded in Sales.) b) On December 1, the store received $5,000 from the local community theater for the rental of certain furniture to be used in a stage production during December and January. The furniture will be returned on February 1. c) On December 31 the store was notified it will be required to restore the area (considered a land improvement) surrounding one of its parking lots, when the store moves in 5 years. Ben determined it will cost $78,000 in 2027. Ben estimates the fair value of the asset retirement obligation on December 31, 2022 is $61,500. Prepare the necessary journal entries necessary to record the above transactions as they occurred and any adjusting…arrow_forwardDouglas Corporation reports it sold merchandise on account for a total of $800,000 for the current year. The cost to Douglas for the merchandise was $300,000. To encourage early payment, Douglas offers its customers credit terms of 1/10, n/30. At year-end, there is $150,000 of sales on account still eligible for the 1 percent discount. Douglas believes that all customers will pay within the discount period to receive the discount. Prepare the adjusting journal entry needed for Douglas Corporation to comply with the new revenue recognition standard. Assume Douglas’s fiscal year-end is December 31.arrow_forward
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