Question

The principal Required Prepare the June bank reconciliation for the Chu Prepare any necessary adjusting entries. SERIAL PROBLEM: KATE'S CARDS estigate the cash han ve stealing funds. "I have no sited receipts amounted to e cashier (who works conciliation doesn't ier told me that these checks Kales Cards (Note: This is a continuation of the Serial Problem: Kate's Cards from Chapters 1 through SP7. On February 15, 2019. Kate Collins, owner of Kate's Cards, asks you to investigate 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. undeposited recei more than $12.000, although the January 31 bank reconciliation prepared by the cashier in the treasurer's department) shows only $7.238.40. Also, the January bank reconcil show several checks that have been outstanding for a long time. The cashier told me that needn't appear on the reconciliation because he had notified the bank to stop payment on the 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 reco prepared by the cashier: hement) shows onlanding for a longed the bank te KATE'S CARDS Bank Reconciliation January 31, 2019 Balance from general ledger ... $10,893.89 Ending balance from bank statement... Add: Deposits in transit..... $ 4,843.69 7,238.40 $12,082.09 Less: Outstanding checks: No. 2351 No. 2353 ...... No. 2354 Reconciled cash balance. Less: Bank service charge. . . . . . . . $ 60.00 Unrecorded credit . . . . . . . . . . 1,200.00 (1,260.00) $1,100.20 578.32 969.68 (2,448.20) $ 9,633.89 Reconciled cash balance .... $ 9,633.89

Answer 1

Ans
a.	Checks outstanding for more than 10 months
	$                                                                                             600.00
	$                                                                                             466.90
	$                                                                                             253.10	$   1,320.00
	Check no 2353 twice entered	$       578.32
	Unrecorded bank credit appeared in deposit column	$   1,200.00
	Total fund stolen by the employee	$   3,098.32
b.	First of all he did no add back the uncleared checks that were outstanding for more than 10 month.
	Secondly he make sure that the deposit in transit of $ 7238.4 matches with the bank deposit so that the theft can not be revealed.
c.	For cash controling , suggestion to Kate would be to have the self custody of the check book.
	To check the bank reconciliation on daily basis as far as the general ledger and bank statement are concerned.
	She need to to make sure all the uncleared checks are written back if it crosses the required time limit of check expiry. She need to make sure that all the checks are written against the invoice amount so that there would not be any mismatch in check amount and invoice amount.