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.

Transcribed Image Text:

3,231 Balance per bank, November 30 Add: Deposits outstanding Less: Checks outstanding #363 #365 #380 #381 #382 Adjusted balance per bank, November 30 3,625 1,200 123 201 86 340 (806) Balance, December 1 $3,231 Deposits Checks processed 41,918) Service charges NSF checks Balance. December 31 $3.851 43,000 (22) (440)