Delicious Pies Pty Ltd is a very profitable small business. It has not, however, given much consideration to internal control. For example, in an attempt to keep clerical and office expenses to a minimum, the job of cashier and bookkeeper have been combined. As a result, Rob Rowe handles all cash receipts, keeps the accounting records, and prepares the monthly bank reconciliation.

The balance as per the bank statement on 31 October 2019 was $25,732. Unpresented cheques were: no. 62 for $177.45, no. 183 for $210, no. 284 for $354.55, no. 862 for $266.99, no. 863 for $317.52 and no. 864 for $231.39. Included in the bank statement was a credit entry of $280 including the collection of a note receivable for Delicious Pies Pty Ltd by the bank on 25 October. The entry had not been recorded by Delicious Pies Pty Ltd.

The entity's ledger showed one cash account with a balance of $30,369.81. The balance included undeposited receipts of $5,313.71. He then prepared the following incorrect bank reconciliation in an effort to conceal his theft of cash:

Cash balance as per company records 31 October

$30,369.81

Add unpresented cheques

No. 862

$266.99

No. 863

317.52

No. 864

231.39

675.90

31,045.71

Less Undeposited receipts

5,313.71

Cash balance as per bank statement, 31 October

$25,732.00

Required

a)reconstruct a correct bank reconciliation statement.(Hint: Deduct the amount of the theft from the balance as per company records).