Green Construction Inc. has poor internal control. Recently, Jean Ouimet, the owner, has suspected the cashier of stealing. Here are some details of the business's cash position at June 30, 2014:

a. The Cash account shows a balance of $10,402. This amount includes a June 30 deposit of $3,794 that does not appear on the June 30 bank statement.

b. The June 30 bank statement shows a balance of $8,224. The bank statement lists a $200 bank collection, an $8 service charge, and a $36 NSF cheque. The accountant has not recorded any of these items.

c. At June 30, the following cheques are outstanding:

Cheque .........................No. Amount

154............................... $116

256.............................. 150

278.............................. 853

291.............................. 990

292.............................. 206

293............................... 145

d. The bookkeeper records all incoming cash and makes bank deposits. He also reconciles the monthly bank statement. Here is his June 30 reconciliation:

Requirement
Ouimet has requested that you determine whether the cashier has stolen cash from the business and, if so, how much. He also asks you to explain how the cashier has attempted to conceal the theft. To make this determination, you perform your own bank reconciliation. There are no bank or book errors. Ouimet also asks you to evaluate the internal controls and to recommend any changes needed to improve them.

Transcribed Image Text:

Balance per books, June 30. Add: Outstanding cheques $10,402 1,460 200 12,062 Snbtota Less: Deposits in t $3,794 8 Service charge NSF cheque 36 3.838) Balance per bank, June 30