An examination of the cash activities during the year shows the following.

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.

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, 2012, 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, and expenses?

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GREAT ADVENTURES Cash Account Records July 1, 2012, to December 31, 2012 Deposits Checks/Debit Cards Date Desc. Amount Date No Desc. Amount 01 Insurance 102 Legal fees DC Advertising 103 Bikes Stock sale S 20,000 7/1 S 4,800 1,500 300 12,000 700 28,000 1,800 2,400 1,200 2,000 2,000 2,000 7/15 Clinic receipts 7/22 Clinic receipts 7/30 Clinic receipts 2,000 7/2 2300 7Π 4,000 7/8 0,000 7/24DC Advertising 3,000 8/4 10,500 13,200 9/1 17,900 12/8 20,000 12/16 07 Salary Borrowing 8/10 Clinic receipts 8/17 Clinic receipts 9/21 Clinic receipts 10/17 Clinic receipts 12/15 Race receipts 104 Kayaks 8/24 DC Office supplies 105 Rent 106 Race permit 12/31 108 Dividend 12/31 109 Dividend $122,900 SUMMARY OF TRANSACTIONS Beginning Cash Balance Ending Cash Balance July 1,2012Deposits $122,900 Checks Deember 31, 2012 $58,700 $0 $64,200 Member FDIC Summit Bank Leading You to the Top Account Holder: Great Adventures, Inc. Account Number: 1124537774 Statement Date: Dec. 31, 2012 Account Summary and Credits Withdrawals and Debits Beginning Balance July 1, 2012 Ending Balance December 31, 2012 $50,500 Total Total $52,900 $103,400 11 Account Details Deposits and Credits Withdrawals and Debits Daily Balance Date Amount Desc Date No. Amount Desc 7/1 101 $ 4,800 CHK 7/7 102 1,500 CHK Amount $15,200 13,400 1,400 7/1 $20,000 DEP 8,300 DEP 30,000 DEP 9/1 13,500 DEP 200 INT 10/1 13,200 DEP 11/1 17,900 DEP 300 INT 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 1,200 CHK 12/31 300 DC 700 DC 1,800 DC 100 SF 100 SF 39,000 11,000 9,200 22,700 20,300 20,400 33,600 51,500 12/10 50,300 12/31 $50,500 9/30 4 8/24 9/2 10/1 Desc. DEP Customer deposit CHK Customer check INT Interest earned DC Debit card SF Service fees