Expert answer:Preparing Comprehensive Bank Reconciliation

Solved by verified expert:Assignment Steps Resources: Financial Accounting: Tools for Business Decision Making Scenario: Daisey 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 book-keeper. 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, 2017, was $18,380. Outstanding checks were No. 62 for $140.75, No. 183 for $180, No. 284 for $253.25, No. 862 for $190.71, No. 863 for $226.80, and No. 864 for $165.28. Included with the statement was a credit memorandum of $185 indicating the collection of a note receivable for Daisey Company by the bank on October 25. This memorandum has not been recorded by Daisey. The company’s ledger showed one Cash account with a balance of $21,877.72. The balance included undepositied cash on hand. Because of the lack of internal controls, Bret took for personal use all of the undeposited receipts in excess of $3,795.51. He then prepared the following bank reconciliation in an effort to conceal his theft of cash:Cash balance per books, October 31 $21,877.72Add: Outstanding checks No. 862$190.71 No. 863226.80 No. 864165.28482.79 22,360.51Less: Undeposited receipts 3,795.51Unadjusted balance per bank, October 31 18,565.00Less: Bank credit memorandum 185.00Cash balance per bank statement, October 31 $18,380.00Prepare a 1,050-word bank reconciliation report (hint: deduct the amount of the theft from the adjusted balance per books) including the following: Indicate the three ways that Bret attempted to conceal the theft and the dollar amount involved in each method.What principles of internal control were violated in this case? Show all work in the Excel® spreadsheet and submit with the reconciliation report.
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acc290_r7_preparing_comprehensive_bank_reconciliation_with_theft_and_internal_control_deficiencies_guide_week5.doc

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Name
Section
Date
Problem 7-6A
Daisey Company
(a)
DAISEY COMPANY
Bank Reconciliation
October 31, 2017
No.
Amount
No.
Amount
(b) and (c)
(b)
(c)
418
Preparing Comprehensive Bank
Reconciliation with Theft and Internal
Control Deficiencies Grading Guide
ACC/290 Version 7
Principles of Accounting I
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Preparing Comprehensive Bank
Reconciliation with Theft and
Internal Control Deficiencies
Grading Guide
ACC/290 Version 7
Individual Assignment: Preparing Comprehensive Bank Reconciliation with Theft and
Internal Control Deficiencies
Purpose of Assignment
Reconciling bank accounts is a good way to help maintain internal controls over cash. With time lags and
posting errors it is easy for cash transactions to be omitted, recorded in a different accounting period, or reflect
incorrect amounts. This assignment with give you practical experience in reconciling the cash balance as noted
on the company books to the bank’s records.
Resources Required
Financial Accounting: Tools for Business Decision Making.
Grading Guide
Content
Prepared a bank reconciliation report (hint:
deduct the amount of the theft from the
adjusted balance per books) including the
following:
•
•
Indicate the three ways that Bret
attempted to conceal the theft and the
dollar amount involved in each
method.
What principles of internal control
were violated in this case?
Report was based on the following scenario:
Daisey 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, 2017, was $18,380. Outstanding
checks were No. 62 for $140.75, No. 183 for
$180, No. 284 for @253.25, No. 862 for
$190.71, No.863 for $226.80, and No. 864 for
$165.28. Included with the statement was a
credit memorandum of $185 indicating the
Met
Partially
Met
Not Met
Comments:
2
Preparing Comprehensive Bank
Reconciliation with Theft and
Internal Control Deficiencies
Grading Guide
ACC/290 Version 7
Content
Met
Partially
Met
Not Met
Total
Available
Total
Earned
5
#/5
Partially
Met
Not Met
Comments:
collection of a note receivable for Daisey
Company by the bank on October 25.
This memorandum has not been recorded by
Daisey.
The company’s ledger showed one Cash
account with a balance of $21,877.72. The
balance included undepositied cash on hand.
Because of the lack of internal controls, Bret
took for personal use all of the undeposited
receipts in excess of $3,795.51. He then
prepared the following bank reconciliation in
an effort to conceal his theft of cash.
The bank reconciliation report was 1,050
words in length.
Writing Guidelines
The paper—including tables and graphs,
headings, title page, and reference page—is
consistent with APA formatting guidelines and
meets course-level requirements.
Intellectual property is recognized with in-text
citations and a reference page.
Paragraph and sentence transitions are
present, logical, and maintain the flow
throughout the paper.
Sentences are complete, clear, and concise.
Rules of grammar and usage are followed
Met
Comments:
3
Preparing Comprehensive Bank
Reconciliation with Theft and
Internal Control Deficiencies
Grading Guide
ACC/290 Version 7
Writing Guidelines
Met
Partially
Met
Not Met
Total
Available
Total
Earned
3
#/3
8
#/8
including spelling and punctuation.
Assignment Total
Additional comments:
#
Comments:
4
…
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