During the preparation of the bank reconciliation for Apache Grading Co., Sarah Ferrari, the assistant controller, discovered that Rocky Spring Bank incorrectly recorded a $610 check written by Apache Grading Co. as $160. Sarah has decided not to notify the bank but wait for the bank to detect the error. Sarah plans to record the $450 error as Other Income if the bank fails to detect the error within the next three months. Discuss whether Sarah is behaving in a peofessional manner.
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- During the preparation of the bank reconciliation for Apache Grading Co., Sarah Ferrari, the assistant controller, discovered that Rocky Spring Bank incorrectly recorded a $610 check written by Apache Grading Co. as $160. Sarah has decided not to notify the bank but wait for the bank to detect the error. Sarah plans to record the $450 error as Other Income if the bank fails to detect the error within the next three months. Discuss whether Sarah is behaving in a professional manner.During the preparation of the bank reconciliation for The Image Co., Chris Renees, the assistant controller,discovered that Empire National Bank incorrectly recorded a $936 check written by The Image Co. as $396. Chris has decided not to notify the bank but wait for the bank to detect the error. Chris plans to record the $540 error as Other Income if the bank fails to detect the error within the next three months. Determine whether Chris is behaving in a professional manner.During the preparation of the bank reconciliation for Building Concepts Co., Joel Knolls, the assistant controller, discovered that Lone Peak National Bank incorrectly recorded a $3,290 check written by Building Concepts Co. as $329. Joel has decided not to notify the bank but wait for the bank to detect the error. Joel plans to record the $2,961 error as Other Income if the bank fails to detect the error within the next three months.Discuss whether Joel is behaving in a professional manner.
- During the preparation of the bank reconciliation for Building Concepts Co., Joel Kimmel, the assistant controller, discovered that Lone Peak National Bank incorrectly recorded a $3,290 check written by Building Concepts Co. as $329. Joel has decided not to notify the bank but wait for the bank to detect the error. Joel plans to record the $2,961 error as Other Income if the bank fails to detect the error within the next three months. Discuss whether Joel is behaving in a professional manner.Natalie decides that she cannot afford to hire John to do her accounting. One way that she can ensure that her cash account does not have any errors and is accurate and up-to-date is to prepare a bank reconciliation at the end of each month. Natalie would like you to help her. She asks you to prepare a bank reconciliation for June 2020 using the information below.Please refer to the image attached Additionally, take the following information into account. On June 30th, there were two outstanding checks: #595 for $238 and #604 for $297. Premier Bank made a posting error to the bank statement: Check #603 was issued for $425, not $452. The deposit made on June 20 was for $125, which Natalie received for teaching a class. Natalie made an error in recording this transaction. The electronic funds transfer (EFT) was for Natalie’s cell phone use. Remember that she uses this phone only for business. The NSF check was from Ron Black. Natalie received this check for teaching a class to Ron’s…On February 15, 2022, 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 no proof,” she says, “but I’m fairly certain that the January 31, 2022, undeposited receipts amounted to more than $12,000, although the January 31 bank reconciliation prepared by the cashier (who works in the treasurer’s department) shows only $7,238.40. Also, the January bank reconciliation doesn’t show several checks that have been outstanding for a long time. The cashier told me that these checks needn’t appear on the reconciliation because he had notified the bank to stop payment on them and he 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, 2022, bank reconciliation prepared by the cashier: KATE’S CARDS Bank Reconciliation January 31, 2022 Ending balance from bank statement . . . $…
- Question: The following errors were found when the controller at Mountain Motel was doing the June 30 bank reconciliation. On June 25, the bank posted a cheque in the amount of $825 to Mountain’s bank account. The cheque had been written by another company, Mountainside Company. For each of these errors, (a) indicate if and how it would be shown on the bank reconciliation, and (b) prepare the journal entry for Mountain if required. Please explain for the answer.Melissa Jackson, bookkeeper for Kinko Company, cannot prepare a bank reconciliation. The bank statement showed a $3,248.87 balance. Melissa's checkbook showed a $3,420.12 balance. Melissa placed a $522.80 deposit in the bank's night depository on June 30. The deposit did not appear on the bank statement. The bank included two DMs and one CM with the returned checks: $887.05 DM for NSF check, $13.60 DM for service charges, and $488.30 CM (less $18.00 collection fee) for collecting a $488.30 non-interest-bearing note. Check No. 811 for $143.10 and check No. 912 for $109.50, both written and recorded on June 28, were not with the returned checks. The bookkeeper had correctly written check No. 884, $1,310.00, for a new cash register, but she recorded the check as $1,472.00. The May bank reconciliation showed check No. 748 for $367.30 and check No. 710 for $251.30 as outstanding. The June bank statement included check No. 710 but not check No. 748. Complete the June 30, 2015,…Melissa Jackson, bookkeeper for Kinko Company, cannot prepare a bank reconciliation. From the following facts, can you help her complete the June 30, 2020, reconciliation? The bank statement showed a $2,955.82 balance. Melissa's checkbook showed a $3,301.82 balance. Melissa placed a S510.19 deposit in the bank's night depository on June 30. The deposit did not appear on the bank statement. The bank included two DMs and one CM with the returned checks: $690.65 DM for NSF check. $8.50 DM for service charges, and $400.00 CM (less $10 collection fee) for collecting a $400.00 non-interest-bearing note. Check No. 811 for $110.94 and check No. 912 for $82.50, both written and recorded on June 28, were not with the returned checks. The bookkeeper had correctly written check No. 884. $1,000, for a new cash register, but she recorded the check as $1,069. The May bank reconciliation showed check No. 748 for $210.90 and check No. 710 for $195.80 outstanding on April 30. The June bank statement…
- Henry Mills is responsible for preparing checks, recording cash disbursements, and preparing bank reconciliations for Signet Corporation. While reconciling the October bank statement, Mills noticed that several checks totaling $937 had been outstanding for more than one year. Concluding that these checks would never be presented for payments, Mills prepared a check for $937 payable to himself, forged the treasurer’s signature, and cashed the check. Mills made no entry in the accounts for this disbursement and attempted to conceal the theft by destroying the forged check and omitting the long-outstanding checks from subsequent bank reconciliations. Required: Identify the weaknesses in Signet Corporation’s internal control. Explain several audit procedures that might disclose the fraudulent disbursement.Melissa Jackson, bookkeeper for Kinko Company, cannot prepare a bank reconciliation. The bank statement showed a $3,567.87 balance. Melissa's checkbook showed a $3,687.12 balance. Melissa placed a $559.80 deposit in the bank's night depository on June 30. The deposit did not appear on the bank statement. The bank included two DMs and one CM with the returned checks: $736.45 DM for NSF check, $10.40 DM for service charges, and $429.90 CM (less $14.00 collection fee) for collecting a $429.90 non-interest-bearing note. Check No. 811 for $178.70 and check No. 912 for $172.30, both written and recorded on June 28, were not with the returned checks. The bookkeeper had correctly written check No. 884, $1,325.00, for a new cash register, but she recorded the check as $1,440.00. The May bank reconciliation showed check No. 748 for $305.50 and check No. 710 for $223.60 as outstanding. The June bank statement included check No. 710 but not check No. 748. Complete the June 30, 2015,…Henry Mills is responsible for preparing checks, recording cash disbursements, and preparing bank reconciliations for Signet Corporation. While reconciling the October bank statement, Mills noticed that several checks totaling $9,370 had been outstanding for more than one year. Concluding that these checks would never be presented for payments, Mills prepared a check for $9,370 payable to himself, forged the treasurer’s signature, and cashed the check. Mills made no entry in the accounts for this disbursement and attempted to conceal the theft by destroying the forged check and omitting the long-outstanding checks from subsequent bank reconciliations. Required: a. Identify the weaknesses in Signet Corporation’s internal control. b. Explain several audit procedures that might disclose the fraudulent disbursement.