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ACC-305 Week 3 - P7-10 P7-14
ACC-305 Week 3 - P7-10 P7-14
ACC-305 Week 3 - P7-10 P7-14
Evergreen Company sells lawn and garden products to wholesalers. The company’s fiscal year-end is
December 31. During 2011, the following transactions related to receivables occurred:
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 (round all calculations to
the nearest dollar).
2. Prepare any necessary adjusting entries at December 31, 2011. Adjusting entries are only
recorded at year- end (round all calculations to the nearest dollar).
3. Prepare a schedule showing the effect of the journal entries in requirements 1 and 2 on 2011
income before taxes.
April 3, 2011
Accounts receivable........................................................ 7,000
Sales revenue.............................................................. 7,000
Requirement 2
Requirement 3
Income
February 28 $10,000
March 31 7,200
April 3 7,000
April 11 (140)
April 17 (5,000)
April 17 3,200
April 30 (500)
June 30 333
June 30 (67)
December 31 600
P7-14 (Page 389) -El Gato Painting Company (also see included excel file)
El Gato Painting Company maintains a checking account at American Bank. Bank statements are
prepared at the end of each month. The November 30, 2011, reconciliation of the bank balance is as
follows:
Required:
1. Prepare a bank reconciliation for the El Gato checking account at December 31, 2011.
Problem 7-14
Requirement 1
Requirement 2
To record credits to cash revealed by the bank reconciliation.
Advertising expense........................................... 90
Miscellaneous expense (bank service charges).. 22
Accounts receivable (NSF checks).................... 440
Cash................................................................ 552