Chapter 6, Problem 7C

1.

To determine

State  the  manner  by which Company  H will account sales discount at the date of sale under the net method also specify the rationale for the amount recorded as sales under net  method.

2. a

To determine

State the effect of Company H‘s sales revenues and net income when the customers does not take the sales discount under the net method.

2. b

To determine

State the effect of trade discounts on sales revenue and accounts receivable.

2. c

To determine

Provide the manner by which the Company H will account for accounts receivable factored on August 1, 2016.

2. d

To determine

State the effect of interest –bearing notes receivable on its balance sheet and on its income statement for the year ended December 31, 2016.