Balance as of 6/30/12: Cash Acct= $1,618 Bank Statement= $3,000
Deposit in transit: Bank Statement= 600
Outstanding checks: Bank Statement= (1,507)
Note collected by bank: Cash Acct= 2,000
Bank Service Charge: Cash Acct= (25)
NSF Check: Cash Acct= (1,500)
Adjusted cash balance as of 6/30/12: Cash Acct= $2093 Bank Statement= $2093
When reviewing the bank reconciliation, Surf’s auditor was unable to locate any reference to the NSF check on the bank statement. Furthermore, the clerk who reconciles the bank account and records the adjusting entries could not find the actual NSF check that should have been included in the bank statement. Finally, there was no specific reference in the accounts receivable supporting records identifying a party who had written a bad check.
Required:
a) Prepare a corrected bank reconciliation.
b) What is the total amount of cash missing, and how was the difference between the “true cash” per the bank and the “true cash” per the books hidden on the reconciliation prepared by the former employee?
c) What could Surf’s Shop do to avoid cash theft in the future?
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