El Gato Painting Company maintains a checking account at American Bank. Bank statements are prepared at the end of each month. The November 30, 2018, reconciliation of the bank balance is as follows: Balance per bank, November 30 $ 3,301 Add: Deposits outstanding 1,270 Less: Checks outstanding #363 $ 130 #365 208 #380 63 #381 93 #382 410 (904 ) Adjusted balance per bank, November 30 $ 3,667 The companys general ledger checking account showed the following for December: Balance, December 1 $ 3,667 Receipts 43,350 Disbursements (42,553 ) Balance, December 31 $ 4,464 The December bank statement contained the following information: Balance, December 1 $ 3,301 Deposits 43,700 Checks processed (42,618 ) Service charges (29 ) NSF checks (510 ) Balance, December 31 $ 3,844 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 $310 was correctly recorded by the bank but was incorrectly recorded on the books as a $130 disbursement for advertising expense. Included in the banks deposits is a $2,000 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, 2018. 2. Prepare any necessary adjusting journal entries indicated.

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

• Record adjustments to cash revealed by the bank reconciliation. Use the miscellaneous expense account to record the bank service charges.

Note: Enter debits before credits.

Event	General Journal	Debit	Credit
1