HOW TO PREPARE A BANK RECONCILIATION BOOK BALANCE, BEGINNING + CASH RECEIPTS CASH DISBURSEMENTS = UNADJUSTED BOOK BALANCE, ENDING UNRECORDED DEPOSITS ABOVE THE LINE UNRECORDED CHECKS ADJUST- MENTS BANK CHARGES + NOTES COLLECTED BY BANK NOTES PAID BY BANK - N.G. CHECKS + REDEPOSIT OF N. G. CHECKS +/- DEPOSIT CORRECTIONS 1/ - CHECK ADJUSTMENTS - ADJUSTED BOOK BALANCE, ENDING + OUTSTANDING CHECKS DEPOSITS IN TRANSIT +/ - BANK ERRORS + CLEARED DEPOSITS FOR SUBSEQUENT MONTH CLEARED CHECKS FOR SUBSEQUENT MONTH +/- MISC. CLEARED ITEMS FOR SUBSEQUENT MONTH - BANK BALANCE, ENDING A - 12Accounting 321 Professor Nick Dauber, CPA, MST PREPARING A PROOF OF CASH- THE DAUBER METHOD CASH RECEIPTS CASH RECEIPTS PER THE CASH RECEIPTS JOURNAL ADD; PRIOR DEPOSITS IN TRANSIT CLEARING IN CURRENT MONTH LESS: CURRENT MONTH DEPOSITS IN TRANSIT ADD/SUBTRACT: BANK ERRORS IN DEPOSITS ADD/SUBTRACT: CASH RECEIPTS JOURNAL RECORDING ERRORS ADD: UNRECORDED DEPOSITS (EX., NOTES COLLECTED BY BANK) EQUALS: CASH RECEIPTS PER BANK STATEMENT CASH DISBURSEMENTS CASH DISBURSEMENTS PER THE CASH DISBURSEMENT JOURNAL ADD; PRIOR OUTSTANDING CHECKS CLEARING IN CURRENT MONTH LESS: CURRENT MONTH OUTSTANDING CHECKS ADD/SUBTRACT: BANK ERRORS IN DISBURSEMENTS ADD/SUBTRACT: CASH DISBUSEMENT JOURNAL RECORDING ERRORS ADD: UNRECORDED DISBURSEMENTS (EX., NOTES PAID BY BANK) EQUALS; CASH DISBURSEMENTS PER BANK STATEMENT * ABOVE THE LINE ADJUSTMENTS PER BANK RECONCILIATIONStin Kin Company BANK RECONCILIATION VILLAGE BANK ACCOUNT 2 December 31, 2014 Balance per bank (a) $18,375.91 Deposits in Transit (b) 17/30 1,471.10 12/31 2,840.69 4,311.79 Subtotal 22,687.70 Outstanding checks (c) 837 6,000.00 1941 671.80 1966 320.00 1984 1,855.41 1985 3,621.22 1987 2,576.89 1991 4,420.68 (19,466.21) Subtotal 3,221.49 NSF check returned 12/29 (d) 200.00 Bank charges 5.50 Error Check No. 1932 148.10 Customer note collected by the bank ($2,750 plus $275 interest) (e) (3,025.00) Balance per books (1) 550.02 Required: 1. State one or more audit procedures that should be performed by the auditors in gathering evidence in support of each of the items (a) through (1) above. 2. Redraft the bank reconciliation using the Dauber Method, as discussed in class. This problem was adapted from the May 1983 CPA Exam