The problem below with Corrected Bank reconciliation You discover that the $1,200 unrecorded bank credit represents a note collected by the bank onKate's behalf; it appears in the deposits column of the January bank statement. Your investigation alsoreveals that the December 31, 2018, bank reconciliation showed three checks that had been outstandinglonger than 10 months: No. 1432 for $600, No. 1458 for $466.90, and No. 1512 for $253.10. You alsodiscover that these items were never added back into the Cash account in Kate's books. In confirmingthat the checks shown on the cashier's January 31 bank reconciliation were outstanding on that date,you discover that check No. 2353 was actually a payment of $1,658.32 and had been recorded on thebooks for that amount.To confirm the amount of undeposited receipts at January 31, you request a bank statement forFebruary 1–12 (called a cutoff bank statement). This indeed shows a January 1 deposit of $7,238.40.RequiredCalculate the amount of funds stolen by the employee.b. Describe how the employee concealed the theft.What suggestions would you make to Kate about cash control procedures?а.с. SERIAL PROBLEM: KATE'S CARDS(Note: This is a continuation of the Serial Problem: Kate's Cards from Chapters 1 through 6.)On February 15, 2019, Kate Collins, owner of Kate's Cards, asks you to investigate the cash han-dling activities in her business. She believes that a new employee might be stealing funds. “I have noproof," she says, “but I'm fairly certain that the January 31, 2019, undeposited receipts amounted tomore than $12,000, although the January 31 bank reconciliation prepared by the cashier (who worksin the treasurer's department) shows only $7,238.40. Also, the January bank reconciliation doesn'tshow several checks that have been outstanding for a long time. The cashier told me that these checksneedn't appear on the reconciliation because he had notified the bank to stop payment on them and hehad made the necessary adjustment on the books. Does that sound reasonable to you?"At your request, Kate shows you the following (unaudited) January 31, 2019, bank reconciliationprepared by the cashier:SP7.Kate'sCardsKATE'S CARDSBank ReconciliationJanuary 31, 2019Ending balance from bank statement...Add: Deposits in transit. .$ 4,843.697,238.40Balance from general ledger ...$10,893.89$12,082.09Less:Less:Outstanding checks:No. 2351Bank service charge .Unrecorded credit ..2$1,200.0060.00$1,100.20No. 2353(1,260.00)578.32No. 2354969.68(2,448.20)Reconciled cash balance ..$ 9,633.89Reconciled cash balance...$ 9,633.89

You discover that the $1,200 unrecorded bank credit represents a note collected by the bank on Kate's behalf; it appears in the deposits column of the January bank statement. Your investigation also reveals that the December 31, 2018, bank reconciliation showed three checks that had been outstanding longer than 10 months: No. 1432 for $600, No. 1458 for $466.90, and No. 1512 for $253.10. You also discover that these items were never added back into the Cash account in Kate’s books. In confirming that the checks shown on the cashier's January 31 bank reconciliation were outstanding on that date, you discover that check No. 2353 was actually a payment of $1,658.32 and had been recorded on the books for that amount. To confirm the amount of undeposited receipts at January 31, you request a bank statement for February 1–12 (called a cutoff bank statement). This indeed shows a January 1 deposit of $7,238.40. Required Calculate the amount of funds stolen by the employee. Describe how the employee concealed the theft. What suggestions would you make to Kate about cash control procedures? а. b. с.

You discover that the $1,200 unrecorded bank credit represents a note collected by the bank on Kate's behalf; it appears in the deposits column of the January bank statement. Your investigation also reveals that the December 31, 2018, bank reconciliation showed three checks that had been outstanding longer than 10 months: No. 1432 for $600, No. 1458 for $466.90, and No. 1512 for $253.10. You also discover that these items were never added back into the Cash account in Kate’s books. In confirming that the checks shown on the cashier's January 31 bank reconciliation were outstanding on that date, you discover that check No. 2353 was actually a payment of $1,658.32 and had been recorded on the books for that amount. To confirm the amount of undeposited receipts at January 31, you request a bank statement for February 1–12 (called a cutoff bank statement). This indeed shows a January 1 deposit of $7,238.40. Required Calculate the amount of funds stolen by the employee. Describe how the employee concealed the theft. What suggestions would you make to Kate about cash control procedures? а. b. с.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter4: The Balance Sheet And The Statement Of Shareholders' Equity

Section: Chapter Questions

Problem 6C: You are the accountant for Speedy Company and are preparing the financial statements for 2019. Near...

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