Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

El Gato Painting Company maintains a checking account at American Bank. Bank statements are prepared at the end of each month. The November 30, 2016,

El Gato Painting Company maintains a checking account at American Bank. Bank statements are prepared at the end of each month. The November 30, 2016, reconciliation of the bank balance is as follows:

Balance per bank, November 30 $ 3,311
Add: Deposits outstanding 1,280
Less: Checks outstanding
#363 $131
#365 209
#380 64
#381 94
#382 420 (918 )
Adjusted balance per bank, November 30 $ 3,673
The companys general ledger checking account showed the following for December:
Balance, December 1 $ 3,673
Receipts 43,450
Disbursements (42,653 )
Balance, December 31 $ 4,470
The December bank statement contained the following information:
Balance, December 1 $ 3,311
Deposits 43,800
Checks processed (42,718 )
Service charges (30 )
NSF checks (520 )
Balance, December 31 $ 3,843

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 $630 was correctly recorded by the bank but was incorrectly recorded on the books as a $360 disbursement for advertising expense. Included in the banks deposits is a $2,100 deposit incorrectly credited to the companys 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, 2016.

image text in transcribed
2.

Prepare any necessary adjusting journal entries indicated. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

image text in transcribed

Bank Reconciliation Balance per bank statement Aeded 3,673 Deposits outstanding Deduct Corrected cash balance Balance per books Aedet 4,470 Deduct Corrected book balance

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamental Accounting Principles Volume 2

Authors: Kermit Larson, Heidi Dieckmann

15th Canadian Edition

1259087360, 9781259087363

More Books

Students also viewed these Accounting questions