Following is a bank reconciliation for Pizza Express for May 31, 2013:

Because of limited funds, Pizza Express employed only one accountant who was responsible for receiving cash, recording receipts and disbursements, preparing deposits, and preparing the bank reconciliation. The accountant left the company on June 8, 2013, after preparing the May 31 bank reconciliation. His replacement compared the checks returned with the bank statement to the cash disbursements journal and found the total of outstanding checks to be $4,600.

Required
a. Prepare corrected bank reconciliation.
b. What is the total amount of cash missing, and how was the difference between the €œtrue cash€ per the bank and the €œtrue cash€ per the books hidden on the reconciliation prepared by the former employee?
c. What could Pizza Express do to avoid cash theft in thefuture?

Transcribed Image Text:

Bank Statement $22,000 4,250 Cash Account S25,000 Balance as of 5/31/2013 Deposit in transit Outstanding checks Note collected by bank Bank service charge Automatic payment on loan Adjusted cash balance as of 5/31/2013 (465) 1,815 (30) (1,000) S25,785 25,785