Record all required journal entries for May 31, 2010 related to the bank reconciliation including a journal entry for the embezzlement. Assume the embezzlement was never recovered

Problem 1 (50 points) Currency Coins 0000 Deposit Slip Cash Date List of Checks 4/30410 Gilly 915 00 915 00 Total Supreme Company's bookkeeper prepared the bank reconciliation for May 31, 2010. The bookkeeper had the following responsibilities: All bookkeeping the handling of cash receipts, the preparation of the monthly bank reconciliation and the deposit at the bank. Assume that the bookkeeper prepared all of the checks, which were signed by the owner. The owner, on a daily basis verified and signed all checks that were written, counted all cash and verified the debit to cash in the cash receipts journal and the credit to cash in the cash payments journal. Assume that the office manager performed all other duties. Currency Coins 750 00 Deposit Slip Date 5/1/10 Cash List of Checks Jones 25000 Total 100000 Currency Coins 156 00 1 May 31 Bank Statement | Balance of previous bank statement on 4/30 Six deposits and other credits totaling Eleven checks and other debts totaling I Current balance as of this statement $ 12,780 7,596 4,977 S 15, 379 Deposit Slip Cash Date List of Checks 5/4/10 Slade 581 00 73700 Total Currency Coins 500 00 Deposit Slip Date 5/13/10 Cash List of Checks See Duplicate Deposit Slips Page 2 Luce Total 35000 850 00 Date Amount 5/1 $ 915 5/2 $ 1,000 5/ 51 $ 737 5/14 $ 850 5/21 $ 729 5/28 $ 815 5/28 $ (581) 5/31 S (11) 5/31 $2,550 Transition Type Deposit Deposit Deposit Deposit Deposit Deposit NSF Check Service Charge Bank Collection Currency Coins 60000 Deposit Slip Cash Date List of Checks 5/20/10 Pyle Collection on note, principal $2,500) Total 129 00 72900 Date Check # Amount See Carbon Copy of Checks Issued Pages 3-5 392 Currency Coins 44500 Deposit Slip Date 5/27/10 Cash List of Checks Dudley 394 Total 37000 815 00 $ 112 S 5000 S125 S1000) $ 750 $1,000 $ 543 $ 450 $ 175 $ 415 Currency Coins 000 Deposit Slip Cash Date List of Checks 5/31/10 Gilly 5731 4013 91500 915 00 Total Copies of Written Checks Supreme Company Date: 4/17/10 391 Pay to the Order of Jones & Company $ 125.00 NBT Bank One Hundred Twenty-Five and no cents Memo: Supplies Jill Supreme Supreme Company Date: 4/30/10 396 Pay to the Order of Al Kazam Leisure Man S 514.00 NBT Bank Five Hundred fourteen and no cents Memo: Invoice 010 Jill Supreme Supreme Company Date: 4/30/10 397 Pay to the Order of Jones International $ 771.00 Supreme Company Date: 4/15/10 392 Seven Hundred seventy one and no cents Pay to the Order of Jordon $ 112.00 NBT Bank Memo: Invoice 010 Jill Supreme NBT Bank One Hundred twelve and no cents Memo: Invoice 2324 Jill Supreme Supreme Company Date: 4/21/10 Supreme Company Date: 5/01/10 398 Pay to the Order of Cact Office Supplies $ 750.00 NBT Bank Seven Hundred fifty and no cents Memo: Invoice 870 Jill Supreme Pay to the Order of Jones & Company $ 500.00 NBT Bank Five Hundred and no cents Memo: Invoice 5132 Jill Supreme Supreme Company Date: 5/12/10 399 Pay to the Order of Jill Supreme $ 1.000.00 NBT Bank One Thousand and no cents Supreme Company Date: 4/24/10 3194 Memo: Withdrawal Jill Supreme Pay to the Order of King and Company $ 215.00 NBT Bank Two Hundred fifteen and no cents Memo: Invoice 700 Jill Supreme 400 Supreme Company Date: 5/20/10 Pay to the Order of Hookab $ 543.00 Supreme Company Date: 4/28/10 395 $ 100.00 NBT Bank Pay to the Order of Jones & Company Five Hundred forty three and no cents Mama.lv 671 Memo: Invoice 700 Jill Supreme Supreme Company Date: 5/20/10 400 Pay to the Order of Hookah $ 543.00 NBT Bank Five Hundred fody three and no cents 395 Supreme Company Date: 4/28/10 Pay to the Order of Jones & Company NBT Bank One Hundred and no cents $ 100.00 Memo: Invoice 571 Jill Supreme Memo: Invoice 2360 Jill Supreme Supreme Company Date: 5/22/10 401 Pay to the Order of King & Company $ 450.00 NBT Bank Four Hundred fifty and no cents Memo: Invoice 556 Jill Supreme Supreme Company Date: 6/24/10 402 SUPREME COMPANY'S BOOKS Pay to the Order of Utility Company $ 175.00 NBT Bank One Hundred seventy-five and no cents JS Memo: May Electric Bill Jill Supreme Cash Receipts Recorded in Cash Receipts Journal Date Cash Debit 5/1 $ 1.000 5/4 $ 737 IJS 5/9 $ 1.285 JS 5/13 $ 850 1JS 5/20 $ 729 JS 5/27 $ 815 JS 5/31 $ 915 | JS Total= $6.331 Supreme Company Date: 5/27/10 403 Pay to the Order of Allyog S 415.00 NBT Bank Four Hundred fifteen and no cents Memo: Invoice 5002 Jill Supreme Supreme Company Date: 5/28/10 404 Cash Payments Recorded in Cash Payments Journal Check No. Cash Credit 398 $ 750 399 | $ 1.000 400 $ 345 401 $ 450 La T 176 Pay to the Order of Gardiner Company $ 300.00 May 31, 2010 SUPREME COMPANY BANK RECONCILIATION April 30, 2010 Cash balance according to bank statement Add: Deposits in Transit 5/31 $ 15,376 IS 915 S915 $ 16,294 $12.760 Cash balance according to bank statement Add: Deposits in Transit 4/30 S 915 $ 915 $ 13,675 Outstanding Checks: 404 405 408 407 S 300 S 160 S 514 S 800 $ 1,774 $ 14,520 Adjusted Balance Outstanding Checks: 391 392 393) 394 395 398 397 $ 125 S 112 S 500 S 215 S 100 $ 514 S 771 S 2,337 $11.338 Adjusted Balance Cash balance according to the ledger TS 9.200 Add: Additions to bank account not recorded on books proceeds from collection of note Principal $2,500 Interest S 50 Error in recording check 1891 S1801 S 2.730 $ 11.930 Deductions by bank not recorded on books: Check Returned NSF $ 581 Bank Service Charge S11 $ 592 Adjusted Balance $ 11,338 Cash balance acoording to the ledger $ 12,76 Add Additions to bank account not recorded on books proceeds from collection of note Principal $2,500 Interest S 50 $ 2.55 1$ 15.31 Deductions by bank not recorded on books: Check Returned NSF $ 581 Bank Service Charge S 11 Error in recording check 400 $ 198 $ 796 Adjusted Balance $ 14,52 Required: Review the Bank Reconciliation prepared by your employee on May 31 above and prepare a corrected bank reconciliation. (Prepare on the Group Project Excel Spreadsheet Problem 1 parts 1 & 4 tab). 2. Explain why you think your corrected bank reconciliation does not balance. How did the employee conceal the embezzlement? (Prepare on the Group Project Excel Spreadsheet Problem 1 parts 2&3 tab) Recommend any improvements to internal controls to prevent this embezzlement from occurring again. Assume that the only parties who will be working in this business will be Jill