Business Finance 2023 P7-14 _ El Gato Painting Company_Bank Reconciliation
P7 14 El Gato Painting Company Adjust the problem with the figure replace the below amount with this 2023
P7-14 _ El Gato Painting Company
Adjust the problem with the figure / replace the below amount with this item: Balance per bank 7847 & Balance per books 8418
El Gato Painting Company maintains a checking account at American Bank. Bank statements are prepared at the end of each month. The November 30, 2011, reconciliation of the bank balance is as follows:
Add: Deposits outstanding 1,200
Less: Checks outstanding
#382 340 (806)
Adjusted balance per bank, November $3,625
The company’s general ledger checking account showed the following for December:
Balance, December 1 $3,625
Balance, December 31 $ 4,422
The December bank statement contained the following information:
Balance, December 1 $ 3,231
Checks processed (41,918)
Service charges (22)
NSF checks (440)
Balance, December 31 $3,851
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 discovered that check # 411 for $320 was correctly recorded by the bank but was incorrectly recorded on the books as a $230 disbursement for advertising expense. Included in the bank’s deposit is a $1,300 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 re-deposited and the company will seek payment from the customers involved.
Review the information pertaining to El Gato Painting Company and prepare the following:
- Prepare a bank reconciliation for the El Gato checking account at December 31, 2011.
- Prepare any necessary adjusting journal entries indicated.
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