El Gato Painting Company maintains a checking account at American Bank. Bank statements are prepared at the end of each month. The November 30, 2024, reconciliation of the bank balance is as follows: Balance per bank, November 30 Add: Deposits outstanding Less: Checks outstanding #363 #365 #380 #381 #382 Adjusted balance per bank, November 30 $ 3,381 1,350 $138 216 71 101 240 (766) $ 3,965 The company's general ledger checking account showed the following for December: Balance, December 1 Receipts Disbursements Balance, December 31 $ 3,965 44,150 (43,353) $ 4,762 The December bank statement contained the following information: Balance, December 1 Checks processed Deposits Service charges NSF checks Balance, December 31 $ 3,381 44,500 (43,418) (37) (590) $3,836 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 $530 was correctly recorded by the bank but was incorrectly recorded on the books as a $350 disbursement for advertising expense. Included in the bank's deposits is a $2,800 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 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, 2024. 2. Prepare any necessary adjusting journal entries indicated.
El Gato Painting Company maintains a checking account at American Bank. Bank statements are prepared at the end of each month. The November 30, 2024, reconciliation of the bank balance is as follows: Balance per bank, November 30 Add: Deposits outstanding Less: Checks outstanding #363 #365 #380 #381 #382 Adjusted balance per bank, November 30 $ 3,381 1,350 $138 216 71 101 240 (766) $ 3,965 The company's general ledger checking account showed the following for December: Balance, December 1 Receipts Disbursements Balance, December 31 $ 3,965 44,150 (43,353) $ 4,762 The December bank statement contained the following information: Balance, December 1 Checks processed Deposits Service charges NSF checks Balance, December 31 $ 3,381 44,500 (43,418) (37) (590) $3,836 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 $530 was correctly recorded by the bank but was incorrectly recorded on the books as a $350 disbursement for advertising expense. Included in the bank's deposits is a $2,800 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 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, 2024. 2. Prepare any necessary adjusting journal entries indicated.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:El Gato Painting Company maintains a checking account at American Bank. Bank statements are prepared at the end of each month.
The November 30, 2024, reconciliation of the bank balance is as follows:
Balance per bank, November 30
Add: Deposits outstanding
Less: Checks outstanding
#363
#365
#380
#381
#382
$ 138
216
71
101
240
$ 3,381
1,350
(766)
Adjusted balance per bank, November 30
$ 3,965
The company's general ledger checking account showed the following for December:
Balance, December 1
Receipts
Disbursements
Balance, December 31
$ 3,965
44,150
(43,353)
$ 4,762
The December bank statement contained the following information:
Balance, December 1
Checks processed
Deposits
Service charges
NSF checks
Balance, December 31
$ 3,381
44,500
(43,418)
(37)
(590)
$ 3,836
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 $530 was correctly recorded by the bank but was incorrectly recorded on the books as a $350
disbursement for advertising expense. Included in the bank's deposits is a $2,800 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 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, 2024.
2. Prepare any necessary adjusting journal entries indicated.
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