Question
Item4 6points ItemSkipped eBook Print References Check my workCheck My Work button is now enabled3 Item 4 El Gato Painting Company maintains a checking account
Item4
6points
ItemSkipped
eBook
References
Check my workCheck My Work button is now enabled3
Item 4
El Gato Painting Company maintains a checking account at American Bank. Bank statements are prepared at the end of each month. The November 30, 2021, reconciliation of the bank balance is as follows:
Balance per bank, November 30 | $ | 3,411 | ||||
Add: Deposits outstanding | 1,380 | |||||
Less: Checks outstanding | ||||||
#363 | $ | 141 | ||||
#365 | 219 | |||||
#380 | 74 | |||||
#381 | 104 | |||||
#382 | 270 | (808 | ) | |||
Adjusted balance per bank, November 30 | $ | 3,983 | ||||
The companys general ledger checking account showed the following for December:
Balance, December 1 | $ | 3,983 | ||
Receipts | 44,450 | |||
Disbursements | (43,653 | ) | ||
Balance, December 31 | $ | 4,780 | ||
The December bank statement contained the following information:
Balance, December 1 | $ | 3,411 | |||
Deposits | 44,800 | ||||
Checks processed | (43,718 | ) | |||
Service charges | (40 | ) | |||
NSF checks | (620 | ) | |||
Balance, December 31 | $ | 3,833 | |||
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 $860 was correctly recorded by the bank but was incorrectly recorded on the books as a $680 disbursement for advertising expense. Included in the banks deposits is a $3,100 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, 2021. 2. Prepare any necessary adjusting journal entries indicated.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started