P7.7 (LO 1, 2, 3) Daisey Company 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 ex- penses to a minimum, the company has combined the jobs of cashier and bookkeeper. As a result, Bret Turrin handles all cash receipts, keeps the accounting records, and prepares the monthly bank reconciliations. The balance per the bank statement on October 31, 2020, was $18,380. Outstanding checks were No. 62 for $140.75, No. 183 for $180, No. 284 for $253.25, No. 862 for $190.71, No. 863 for $226.80, and No. 864 for $165.28. Included with the statement was a credit memorandum of $185 indicating the collection of a note receivable for Daisey Company by the bank on October 25. This memorandum has not been recorded by Daisey. The company's ledger showed one Cash account with a balance of $21,877.72. The balance in- cluded undeposited cash on hand. Because of the lack of internal controls, Bret took for personal use all of the undeposited receipts in excess of $3,795.51. He then prepared the following bank reconciliation in an effort to conceal his theft of cash. Cash balance per books, October 31 Add: Outstanding checks No. 862 No. 863 No. 864 Less: Undeposited receipts Unadjusted balance per bank, October 31 Less: Bank credit memorandum Cash balance per bank statement, October 31 $21,877.72 $190.71 226.80 165.28 482.79 22,360.51 3,795.51 18,565.00 185.00 $18,380.00 Adjusted cash bal. $21,018.72 Instructions a. Prepare a correct bank reconciliation. (Hint: Deduct the amount of the theft from the adjusted bal- ance per books.) b. Indicate the three ways that Bret attempted to conceal the theft and the dollar amount involved in each method. c. What principles of internal control were violated in this case