Bronys Bikes maintains two general demand deposit bank accounts and an interest payroll account. One of the general bank accounts and the payroll account are with Dallas Dollar Bank. The second demand deposit account is with Bank Two, the Chicago bank from which Bronys Bikes obtained the $45 million loan referred to in Module I. As part of the cash audit, Derick has asked you to reperform the reconciliation of all three of the bank accounts for December 20X9, and to do an analysis of inter-bank transfers between Dollar Bank and Bank Two.

Recall that Bronys Bikes has reconciled all bank accounts for each of the 12 months. You will begin, therefore, with the companys documentation of its December 20X9 reconciliations. By re-performing the bank reconciliations, you will be able to determine if:

• all the deposits have been listed correctly
• all the outstanding checks are outstanding
• the deposits in transit are in fact deposits in transit

*This verification is usually performed by requesting a bank cut-off statement from the bank.

Directions

1. Open and save the 20X9 bank file located in Blackboard.

• Locate the following documentation in the file:
• WP 1.A - Cash on hand and in banks
• WP 1.B - Bank reconciliationDallas Dollar Bank
• WP 1.C - Inter-bank transfer schedule

Using the information and the .pdf exhibit provided in Blackboard, complete the following tasks and answer the questions in the Questions tab in the file labeled 20X9 bank, available in Blackboard.

1. In tracing cash disbursements from the December check register to the bank statement, you learn that check 44264, in the amount of $642,752, was recorded incorrectly as $651,752.

• Incorporate this misstatement into the appropriate section of the bank reconciliation.
• Refer to BB.16 and if check 44264 was in payment of accounts payable, draft the necessary audit adjustment at the bottom of WP 1.B in the audit adjustments column of the lead schedule.