SARBANES-OXLEY, INTERNAL CONTROL, AND CASH
The March 2014 bank reconciliation, detailed below, was incorrectly prepared (NOTE: the descriptions and amounts of the listed items are correct).
Because the bank reconciliation did not balance, the ledger account balances provided (in the form of T-accounts) are shown BEFORE the bank
reconciliation journal entries were posted. The financial statements were left unfinished as well.
Your Challenge today is to:
	1	Prepare a correct bank reconciliation (the form is provided on the following page).
	2	Prepare the necessary journal entries stemming from the correctly prepared bank reconciliation. Be sure to include proper dates
			AND explanations for each journal entry.
	3	Post the journal entries you prepared to the ledger using the T-accounts provided.
	4	Correctly complete the incomplete financial statements.
	5	Answer the questions below.
Steggo Corporation
Bank Reconciliation
March 31, 2014
Cash balance according to bank statement								$	11708		Cash balance according to companys books							$	16659
Add:	Check from customer to pay on A/R, returned										Add:	Proceeds of note collected by bank
		by customer's bank as NSF							1976				Principal	$	3000
									13684				Interest		120	$	3120
												Bank service charges					75		3195
Deduct:	Deposits in transit on March 31					$	9460												19854
	Error in March 10 deposit. Deposit
		was for actual cash sales of									Deduct:	Outstanding checks
		$9,765. Deposit was recorded											No.		854		600
		correctly by the bank but													862		884
		incorrectly in journal as $7,965					1800		11260						863		156
																			1640
Updated cash balance								$	2424		Updated cash balance							$	18214
5.	QUESTIONS
		How would the financial statements be affected if you did not post the journal entries from the bank reconciliation to the ledger?
		Income Statement			Understated/Overstated/No Change							Balance Sheet			Understated/Overstated/No Change
		Total revenue										Total assets
		Total expenses										Total liabilities
		Net income										Total stockholders' equity

The correct bank reconciliation statement is provided below: The required journal entries are provided below: Rest part cannot be answered because t-0accounts are not provided as mentioned in the