SP7. C oohs On February 2019. Kate Collins. owner of Kate's Cards, asks you to investigate the cash han- dling activities in business. She believes a employee might Stealing funds. proof." she says. "but I'm fairly certain that the January 31.2019. undeposited receipts amounted to mre tlm Januuy I by works in the department' shows onlv S7_238.40. the bank reconciliation doesn't several checks that have Iven outstanding a long time, cashier told that these checks t the notifie%i to stop on and he had made the necessary adjustment on the books. Does that sound reasonable to your At your r&luest, Kate following l. 2019. prepared by the cashier KATES c ARDS Bank Reconciliation January 2019 Ending taiance Trom Dank statement. AdC Deposits in transit . checks: u. 2351 Recc#1eC casn DaLame Sl ,10020 57B 32 969,68 s 4.64360 723Z AO S12,oe2.og s 9.6089 Balance Tron-I general eoger credit Reconciled casn balance 6000 20000 SIO,S93.d9 s 9.63489 You discover that the Sl .200 unrecorded bank cledit represents a note collected by the bank on Kate 's behalf: it appears in the deposits column of the January bank statement. Your investigation also reveals that the December 31.201 S. bank reconciliation showed three checks that had Iren outstanding longer than 10 months: No. 1432 forSOOO. No. 1458 for *60.90. and No. 1512 forS253.10. You also discover that these items were never added back into the Cash account in Kate s books. In confirrning that the checks shown on the cashier's January 31 bank reconciliation were outstanding on that date. you discover that check No. 2353 was actually a payment of Sl .658.32 and had been recorded the books for that amount. To confirm the amount of undeposited receipts at January 31. you request a bank statement for February 112 (called a cutoff bank statement). mis indeed shows a January I deposit ofS7,23S.40. R eq uire d Calculate the amount Of funds stolen by the employee. Describe how the employee concealed the theft. What suggestions would you make to Kate about cash control procedures?