Financial accounting 16th Edition by Jan Williams,Susan Haka,Mark Bettner ,Joseph Carcello

تمرين 9

Protecting Cash
Osage Farm Supply had poor internal control over its cash transactions.acts about the company's cash position at November 30 are described below.
The accounting records showed a cash balance of $35,400, which included a deposit in transit of $1,245.The balance indicated in the bank statement was $20,600.ncluded in the bank statement were the following debit and credit memoranda:


Outstanding checks were as follows:

Bev Escola, the company's cashier, has been taking portions of the company's cash receipts for several months.ach month, Escola prepares the company's bank reconciliation in a manner that conceals her thefts.er bank reconciliation for November was as follows:

Instructions
a.Determine the amount of the cash shortage that has been concealed by Escola in her bank reconciliation.As a format, we suggest that you prepare the bank reconciliation correctly.he amount of the shortage then will bethe difference between the adjusted balances perthe bank statement and perthe accounting records.ou can then list this unrecorded cash shortage as the final adjustment necessary to complete your reconciliation.)
b.Carefully review Escola's bank reconciliation and explain in detail how she concealed the amount of the shortage.nclude a listingofthe dollar amounts that were concealed in various ways.his listing should total the amountof theshortage determined in part a.
c.Suggest some specific internal control measures that appear to benecessary for Osage Farm Supply