Background Information Note the following: Acme Corporation is a publicly listed company ACMEs Fiscal year end is December 31 In addition to the cash account being reconcile here; ACME has a separate Revolving Credit account. This is a revolving credit facility where interest is accrued on the average balance outstanding during the month. The interest amount is required to be paid on a monthly basis. The correct is amount calculated and taken from the account automatically by the bank. The facility has an annual interest rate of 4% Management has set-out in the Financial Statements that the average balance outstanding in this revolving credit facility is normally at around $ 150,000. The Audit Committee has also informed the Partner that the CRA audited ACME in the previous year and levied a penalty of $50,000 and has informed the Board that they plan continue their audit in the new year. Required Part 1 a) From the information provided in EXHIBIT A, perform and document a Bank Reconciliation. - 20 marks b) From the Background info. provided above, identify potential errors and disclosure requirements - 5 marks Part 2 a) Identify the financial assertions relating to the Cash account addressed by the Bank Reconciliation and explain how. 5 marks b) Identify what type of activity the Bank Reconciliation is. 5 marks c) Identify the 6 possible characteristics (of the activity above) and which apply to the Bank Rec. 5 marks BONUS How would the Auditor test the identified characteristics. 4 marks EXHIBIT A ABC Bank Statement Exerpt for Acme Corporartion Bank Account for December 201X Date Description Cash Out Cash In Balance January 7, 2021 Cheque 1415 $ 2,500.00 $ 103,390.00 January 6, 2021 Cheque 1416 $ 3,000.00 $ 105,890.00 January 5, 2021 Cheque 1414 $ 2,000.00 $ 108,890.00 January 4, 2021 $ 110,890.00 January 3, 2021 EFT $ 7,500.00 $ 110,890.00 January 2, 2021 EFT $ 6,000.00 $ 118,390.00 January 1, 2021 Foreign Wire $ 5,250.00 $ 124,390.00 December 31, 2020 Loan Interest - Dec. $ 1,500.00 $ 119,140.00 December 30, 2020 Bank Charges - Dec. $ 250.00 $ 120,640.00 December 29, 2020 Returned Cheque 1412 $ 500.00 $ 120,890.00 December 28, 2020 Cheque 1413 $ 1,500.00 $ 120,390.00 December 27, 2020 CRA Appropriation $ 50,000.00 $ 121,890.00 December 26, 2020 Cheque 1412 $ 500.00 $ 171,890.00 December 25, 2020 $ 172,390.00 December 24, 2020 $ 172,390.00 $ 74,750.00 $ 5,750.00 $ 172,390.00 Acme Corporation General Ledger Cash Account Excerpt Date Transaction Detail Type Debit Credit GL Acct. Balance January 7, 2021 $ 103,390.00 January 6, 2021 Payment to Supplier #11 Cheque 1418 $ 103,390.00 January 5, 2021 Payment to Supplier #12 Cheque 1417 $ 103,390.00 January 4, 2021 Loan Interest - Re: Dec. Taken by Bank $ 1,500.00 $ 103,390.00 January 3, 2021 CRA Appropriation Taken by CRA $ 50,000.00 $ 104,890.00 January 2, 2021 Returned Cheque (Supplier Account Closed) Cheque 1412 $ 500.00 $ 154,890.00 January 1, 2021 Bank Charges - Re: Dec. Taken by Bank $ 250.00 $ 154,390.00 December 31, 2020 Payment to Supplier #4 EFT $ 6,000.00 $ 154,640.00 December 30, 2020 Payment to Supplier #5 Cheque 1416 $ 3,000.00 $ 160,640.00 December 29, 2020 Payment to Supplier #1 EFT $ 7,500.00 $ 163,640.00 December 28, 2020 Payment to Supplier #2 Cheque 1415 $ 2,500.00 $ 171,140.00 December 27, 2020 Receipt from Customer B Foreign Wire $ 5,250.00 $ 173,640.00 December 26, 2020 Receipt from Customer A Cheque 1414 $ 2,000.00 $ 168,390.00 December 25, 2020 Payment to Supplier #2 Cheque 1413 $ 1,500.00 $ 170,390.00 December 24, 2020 Payment to Supplier #3 Cheque 1412 $ 500.00 $ 171,890.00 $ 5,750.00 $ 74,750.00 $ 172,390.00