Slackur Company is a very profitable small business. However, it has not given much consideration to internal controls. For example, in an attempt to keep its clerical and office expenses to a minimum, the company has combined the jobs of cashier and bookkeeper. As a result, Rob Rowe handles all the cash receipts, keeps the accounting records, and prepares the monthly bank reconciliations.
On November 30, 2011, the balance on the company's bank statement was $18,380.00. The outstanding cheques on that date were #143 for $241.75, #284 for $258.25, #862 for $190.71, #863 for $226.80 and #864 for $165.28. Included with the statement was a bank credit memorandum in the amount of $300, indicating the bank's collection of a note receivable for Slackur on November 25, and a debit memorandum in the amount of $50 for the bank's service charges for the month. Neither of these had been recorded by Slackur Company.
The company's cash account had a balance of $21,892.72 on November 30, 2011, which included a substantial amount of undeposited cash on hand. Because he needed cash for holiday shopping and knew that the company's internal controls were weak, Rob decided to take some of the undeposited cash for his personal use and report undeposited cash of only $3,845.51. In an effort to conceal his theft, he then prepared the following bank reconciliation:

When he presented this to the general manager, she called the bank to determine whether the undeposited receipts on November 30 had since been deposited, and was happy to hear the bank confirm that Rob Rowe had made a cash deposit of $3,845.51 on the morning of December 1. She then reviewed the bank reconciliation to satisfy herself that the items on it seemed reasonable, and that it was balanced. Assuming that everything must be in order, she then thanked Rob for his good work and made a mental note to herself that he should be given a $500 year-end bonus.
Required:
a. Determine the amount of cash stolen by Rob Rowe.
b. Explain what Rowe did in the bank reconciliation that he prepared to try to conceal his theft.
c. What should Slackur Company do differently to prevent this type of occurrence?

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Balance per bank statement, November 30 Add. Undeposited receipts Less: Outstanding cheques $18.380.00 3,845.51 No. 862 $190.71 226.80 No. 863 No. 864 Add: Note collected by bank Less: Bank service charges Corrected bank balance, November 30 165.28(582.79) 300.00 (50.00) $21,892.72 Cash balance per books, November 30 S21,892.7