Question

El Gato Painting Company maintains a checking account at American Bank. Bank statements are prepared at the end of each month. The November 30, 2021, reconciliation of the bank balance is as follows:

Balance per bank, November 30				$	3,241
Add: Deposits outstanding					1,210
Less: Checks outstanding
#363	$	124
#365		202
#380		57
#381		87
#382		350			(820	)
Adjusted balance per bank, November 30				$	3,631

The company’s general ledger checking account showed the following for December:

Balance, December 1		$	3,631
Receipts			42,750
Disbursements			(41,953	)
Balance, December 31		$	4,428

The December bank statement contained the following information:

Balance, December 1		$	3,241
Deposits			43,100
Checks processed			(42,018	)
Service charges			(23	)
NSF checks			(450	)
Balance, December 31		$	3,850

The checks that were processed by the bank in December include all of the outstanding checks at the end of November except for check #365. In addition, there are some December checks that had not been processed by the bank by the end of the month. Also, you discover that check #411 for $640 was correctly recorded by the bank but was incorrectly recorded on the books as a $460 disbursement for advertising expense. Included in the bank’s deposits is a $1,400 deposit incorrectly credited to the company’s account. The deposit should have been posted to the credit of the Los Gatos Company. The NSF checks have not been redeposited and the company will seek payment from the customers involved.

Required:
1. Prepare a bank reconciliation for the El Gato checking account at December 31, 2021.
2. Prepare any necessary adjusting journal entries indicated.

Prepare a bank reconciliation for the El Gato checking account at December 31, 2021. Bank Reconciliation Balance per bank statement Add: Deduct: Corrected cash balance Balance per books Deduct: Corrected book balance

Answer 1

Ans Gato checking account at dee 3120 Banh econciliationoyE LAA Amount Panticalan bank statement $3850 Balance pen Depovils oud an ding $ a260 Deduct depost ncurecty Cdibodo compary (4 1400) Banh eool accoun Out olanding checha Coonected ca balance (4 १35 35 $4428 Balance por books Deduct Fomoo1 in 01coxding chech 4 180) (t23) Sovice changs K450 NSF checks Comected booh balance $35

NO Reccipl 4250 Decemten ban deponilk = $ 42l00 Deposit euro 0= 1400 Pitor month's depous cd aandig 110 On dee a, Deposi outetanding 42150-( 43100 -1400-l210 40490 = 4050 December disbunsemen $4 1953 chech # Fooo n eording G40-460 411 80 Total chec deaied 42018 Total prcor months checka 618 December cheks cutanding (42018-G) 41953t180 4a1334400 - 733

checks outstan ding, dec 3 lotal 733 t 0 $935 JOLO nal enry Particula Debit Gedit 480 Adventiaing expense Miacelaneos cxpense ( bank ouie cha 3 Account eceivable (NSF checks) 450 Carh f653