Your assignment as an auditor is to reconcile the general disburseinent account at the Green Dolphin Bank for Monk, Miles, and Trane Co. as of 12-31-06. Your analysis of its cash activity for the month of December 2006 is as follows:

In addition, your study of the 12-31-06 bank statement yields the following:

Finally, the 11-30-06 bank reconciliation yielded the following:

a. Starting from both the bank and book balance, prepare a reconciliation of cash to find the correct cash balance as of 12-31-06. You may assume that all checks written by Monk, Miles, and Trane will clear the bank within a week. What items from the above will you test most thoroughly?

b. How would you audit the bank reconciliation if it had been prepared by the client?

c. Prepare a proof of cash in good form for 12-31-06. What management assertions are addressed by a proof of cash?

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Balance per bank, 12-31-06 $22,800 Balance per books, 12-31-06 14,200 Checks written during December 98,000 Deposits made during December 91,500