gistfile1.rb

### application_controller.rb
class ApplicationController < ActionController::Base
  rescue_from ActiveRecord::RecordNotFound, :with => :not_found

  private

  def not_found(exception)
    respond_to do |format|
      h = { :status => "error", :message => exception.message }
      format.html { render :file => "#{RAILS_ROOT}/public/404.html", :status => :not_found }
      format.json { render :json => h, :status => :not_found }
      format.xml  { render :xml => h, :status => :not_found }
    end 
  end   
end

### applications_controller.rb
class ApplicationsController < ApplicationController
  respond_to :html, :xml, :json

  def show
    @application = Application.find(params[:id], :include => includes) 
    respond_with(@application) do |format|
      format.xml
      format.json
    end
  end
end

### applications_controller_spec.rb

describe ApplicationsController do
  context "for an application that doesn't exist" do
    before do
      Application.should_receive(:find).with('does_not_exist').and_raise(ActiveRecord::RecordNotFound)
    end
    
    it "should return a 404" do
      get :show, :format => :json, :id => 'does_not_exist'
      response.status.should == 404 
    end
  end
end

### rspec output
  1) ApplicationsController JSON GET :show for an application that doesn't exist should return a 404
     Failure/Error: raise ActiveRecord::RecordNotFound
     ActiveRecord::RecordNotFound:
       ActiveRecord::RecordNotFound
     # ./spec/controllers/applications_controller_spec.rb:54:in `index'
     # ./spec/controllers/applications_controller_spec.rb:60:in `block (5 levels) in <top (required)>'