Van Weelden Transport Ltd.'s head office is located in Winnipeg. It has a large branch in Brandon that maintains its own bank account. Cash is periodically transferred to the central account in Winnipeg. On the branch account's records, bank transfers are recorded as a debit to the home office clearing account and as a credit to the branch bank account. Similarly, the '’home office account is recorded as a debit to the central bank account and as a credit to the branch office clearing account. Gordon Whitefish is the head book¬ keeper for both the home office and the branch bank accounts. Since he" also reconciles the bank account, the senior auditor, Cindy Marintette, is concerned about the internal control weakness.

As a part of the year-end audit of bank transfers, Marintette asks you, a member of her staff, to schedule the transfers for the last few days in 2001 and the first few days of 2002. You prepare the following list:

Required

a. In verifying each bank transfer, state the appropriate audit procedures you should perform.

b. Identify the nature of adjusting journal entries required in the home office and the branch bank records.

c. State how each bank transfer should be included in the December 31, 2001, bank reconciliation of the home office account after your adjustments in part (b).

d. State how each bank transfer should be included in the December 31, 2001, bank reconciliation of the branch bank account after your adjustments in part (c).

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AMOUNT OF TRANSFER DATE RECORDED IN THE HOME OFFICE CASH RECEIPTS JOURNAL 27-12-01 DATE RECORDED IN THE BRANCH OFFICE CASH DISBURSEMENTS JOURNAL 29-12-01 2-1-02 DATE DEPOSITED IN THE HOME OFFICE BANK ACCOUNT DATE CLEARED THE BRANCH BANK ACCOUNT 27-12-01 $12,000 20-12-01 26,000 28-12-01 28-12-01 29-12-01 14,000 2-1-02 30-12-01 28-12-01 29-12-01 11,000 26-12-01 26-12-01 28-12-01 3-1-02 15,000 2-1-02 2-1-02 28-12-01 31-12-01 28,000 7-1-02 5-1-02 28-12-01 3-1-02 37,000 4-1-02 6-1-02 3-1-02 5-1-02