Question

Regwired . Prepare the June bank reconciliation b. Prepare any necessary adjusting entries. Is from Chapters I through 6.) SERIAL PROBLEM: KATE'S CARDS i to investigate the cash (Note: This is a continuation of the Serial Problem: Kate's Cards from Chapters / thre EYE aling funds. "have eceipts am ne cashier (who works SP7. Rates Cards bank reconciliation does Id me that these checo On February 15, 2019. Kate Collins, owner of Kate's Cards, asks you to in dling activities in her business. She believes that a new employee might be stealine proof," she says, "but I'm fairly certain that the January 31, 2019, undeposi more than $12.000, although the January 31 bank reconciliation prepared by the cas in the treasurer's department) shows only $7.238.40. Also, the January bank re show several checks that have been outstanding for a long time. The cashier told me needn't an ear on the reconciliation because he had notified the bank to stop payment had made the necessary adjustment on the books. Does that sound reasonable to you At your request, Kate shows you the following (unaudited) January 31, 2019, bank rece prepared by the cashier: out on them ante 1. 2019, bank reconciliation Ending balance from bank statement... Add: Deposits in transit....... .. $10,893.89 KATE'S CARDS Bank Reconciliation January 31, 2019 $ 4,843.69 Balance from general ledger ... 7,238.40 $12,082.09 Less: Bank service charge. . . . . . . . $ 60.00 Unrecorded credit ......... 1,200.00 Less: Outstanding checks: No. 2351.. No. 2353.. No. 2354 Reconciled cash balance......... $1,100.20 578.32 969.68 (1.260.00 (2,448.20) $ 9,633.89 Reconciled cash balance . . . . . . $ 9,633B

Answer 1

a.

Unrecorded bank credits	$ 1,200
Checks outstanding for more than 10 Months (600+466.9+253.1)	$ 1,320
Check No.2353 - less amount booked	$ 1,080
Total amount of funds stolen by employees	$ 3,600

b.

As the Checks outstanding for more than 10 months were expensed off, check payments shown less, bank credits received showed as still pending decreased the bank balance, thereby concealing the theft.

c.

All incomes must be billed properly, take balance confirmation from debtor and creditor on regular basis, bank reconciliation do be done every month, checks more than 3 months must be reversed, followup with collection of debtors