An examination of the cash activities during the year shows the following.
GREAT ADVENTURES
Cash Account Records
July 1, 2015, to December 31, 2015

Suzie has not reconciled the company€™s cash balance with that of the bank since the company was started. She asks Summit Bank to provide her with a six-month bank statement. To save time, Suzie makes deposits at the bank only on the first day of each month.

Summit Bank
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Member FDIC

After comparing the two balances, Suzie has some concern because the bank€™s balance of $50,500 is substantially less than the company€™s balance of $64,200.

Required:
1. Discuss any problems you see with Great Adventures€™ internal control procedures related to cash.
2. Prepare Great Adventures€™ bank reconciliation for the six-month period ended December 31, 2015 and any necessary entries to adjust cash.
3. How did failure to reconcile the bank statement affect the reported amounts for assets, liabilities, stockholders€™ equity, revenues, andexpenses?

Transcribed Image Text:

osits Checks/Debit Cards 1,500 0,500 8/24 DC Office supplies 5 rece 20,000 12/1610 Salary SUMMARY OF TRANSACTIONS Ending Cash Balance Beginning July 1, 2015 Deposits S122,900 Checks December 31, 2015 $58,700 Account Holder: Great Adventures, Inc. Account Number: 1124537774 Statement Date:Dec. 31, 2015 Account Summary Deposits and Credits Withdrawals and Debits Beginning Balance July 1, 2015 SO Total $103,400 No 11 Total $52,900 Ending Balance December 31, 2015 $50,500 Account Details Withdrawals and Debits Deposits and Credits Daily Balance Date Amount Desc, Date No. Amount Desc. Dete Amount $15,200 13,400 1,400 700 39,000 11,000 9,200 22,700 20,300 20,400 33,600 51,500 7/1 $20,000 DEP 8/1 8,300 DEP 8/1 30,000 DEP 9/1 13,500 DEP 200 INT 10/1 13,200 DEP 11/1 17,900 DEP 12/31 300 INT 7/1 101 $4,800 CHK 7/7 102 ,500 CHK 7/1 300 DC 700 DC 1,800 Dc 100 SF 100 SF 7/14 7/24 7/14 103 12,000 CHK 7/24 8/9 104 28,000 CHK 8/24 9/2 105 2,400 CHK 9/30 12/10 106 ,200 CHK 12/31 9/30 8/9 8/24 9/2 9/30 10/1 12/1050,300 12/31 $50,500 $103,400 $52,900 Desc. DEP Customer deposit CHK Customer check INT Interest earned DC Debit card SF Service fees