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			$	3,401
Add: Deposits outstanding				1,370
Less: Checks outstanding
#363	$140
#365	218
#380	73
#381	103
#382	260			(794	)
Adjusted balance per bank, November 30			$	3,977

The companys general ledger checking account showed the following for December:

Balance, December 1		$	3,977
Receipts			44,350
Disbursements			(43,553	)
Balance, December 31		$	4,774

The December bank statement contained the following information:

Balance, December 1		$	3,401
Deposits			44,700
Checks processed			(43,618	)
Service charges			(39	)
NSF checks			(610	)
Balance, December 31		$	3,834

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 $850 was correctly recorded by the bank but was incorrectly recorded on the books as a $580 disbursement for advertising expense. Included in the banks deposits is a $3,000 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.

Bank Reconciliation
Balance per bank statement
Add:
Deposits outstanding
Deduct:
Bank error
Outstanding checks
Corrected cash balance
Balance per books
Add:
Deduct:
Error in recording check
Service charges
NSF checks

Corrected Book Balance:

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.)

Record adjustments to cash revealed by the bank reconciliation.

Journal Entry Worksheet

Event

General Journal

Debit

Credit

1	Advertising expense
	Miscellaneous expense
	Accounts receivable
	Cash