Required :

a. Prepare a bank transfer schedule as of June 30 using the following layout.

Check No.

Bank Accounts

Amount

of

Check

Disbursement

Date

Receipt

Date

From

To

Books

Bank

Books

Bank

b. Prepare separate adjusting entries for any checks that require adjustment.

c. In the reconciliation for the three bank accounts, indicate the check numbers that should appear as (1) an outstanding check or (2) a deposit in transit.

d. Which check(s) may be indicative of kiting?

(Bank transfer schedule; kiting) The LMN Company maintains three bank accounts: City Bank-Regular, City Bank - Payroll, and Metro Bank - Special. Your analysis of cash disbursements records for the period June 23 to July 6 reveals the following bank transfers: Check No. Date of Check Bank Drawn On Payee Amount 2476 2890 3140 A1006 A1245 3402 June 23 June 25 June 28 June 29 June 30 June 30 Regular Regular Regular Special Special Regular Payroll Payroll Special Payroll Regular Special $100,000 200,000 100,000 50,000 25,000 125,000 You determine the following facts about each of the first five checks: (1) the date of the cash disbursements journal entry is the same as the date of the check, (2) the payee receives the check two days later, (3) the payee records and deposits the check on the day it is received, and (4) it takes five days for a deposited check to clear banking channels and be paid by the bank on which it is drawn. Check 3402 was not recorded as a disbursement until July 1. This check was picked up by the payee on the date it was issued, and it was included in the payee's after-hours bank deposit on June 30. Required a. What are the purposes of the audit of bank transfers? b. Prepare a bank transfer schedule as of June 30. c. Prepare separate adjusting entries for any checks that require adjustment. d. In the reconciliation for the three bank accounts, indicate the check numbers that should appear as (1) an outstanding check or (2) a deposit in transit. e. Which check(s) may be indicative of kiting? a. Prepare a bank transfer schedule as of June 30 using the following layout. Date Amount Disbursement Receipt of Date Bank Accounts Check Check No. From Books Bank Books Bank