Outstanding checks No. 862 $196.00 No. 863 270.00 No. 864 178.00 504.00 22,440.00 Less: Undeposited receipts 3,814.00 Unadjusted balance per bank, October 31 18,626.00 Less: Bank credit memorandum 188.00 Cash balance per bank statement, October 31 $18,438.00 - What is the amount taken (theft)
Sheridan Company is a very profitable small business. It has not, however, given much consideration to internal control. For example, in an attempt to keep clerical and office expenses to a minimum, the company has combined the jobs of cashier and bookkeeper. As a result, Bret Turrin handles all cash receipts, keeps the accounting records, and prepares the monthly bank reconciliations.
The balance per the bank statement on October 31, 2022, was $18,438.00. Outstanding checks were No. 62 for $165.00, No. 183 for $175.00, No. 284 for $284.00, No. 862 for $196.00, No. 863 for $270.00, and No. 864 for $178.00. Included with the statement was a credit memorandum of $188.00 indicating the collection of a note receivable for Sheridan Company by the bank on October 25. This memorandum has not been recorded by Sheridan.
The company’s ledger showed one Cash account with a balance of $21,936.00. The balance included undeposited cash on hand. Because of the lack of internal controls, Bret took for personal use all of the undeposited receipts in excess of $3,814.00. He then prepared the following bank reconciliation in an effort to conceal his theft of cash.
| Cash balance per books, October 31 | $21,936.00 | |||
| Add: Outstanding checks | ||||
| No. 862 | $196.00 | |||
| No. 863 | 270.00 | |||
| No. 864 |
178.00
|
504.00
|
||
| 22,440.00 | ||||
| Less: Undeposited receipts |
3,814.00
|
|||
| Unadjusted balance per bank, October 31 | 18,626.00 | |||
| Less: Bank credit memorandum |
188.00
|
|||
| Cash balance per bank statement, October 31 |
$18,438.00
|
- What is the amount taken (theft)?
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