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, 2011, reconciliation of the bank balance is as follows:


The company's general ledger checking account showed the following for December:
Balance, December 1 . 3,625
Receipts ....... 42,650
Disbursements .... 41,853
Balance, December 31 $ 4,422

The December bank statement contained the following information:


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 $320 was correctly recorded by the bank but was incorrectly recorded on the books as a $230 disbursement for advertising expense. Included in the bank's deposits is a $1,300 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 re-deposited 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, 2011.
2. Prepare any necessary adjusting journal entriesindicated.


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  • CreatedJuly 02, 2013
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