SERIAL PROBLEM: KATE'S CARDS vestigate the cash he ealing funds."I have osited receipts amounted the cashier (who works ok reconciliation does old me that these cherche payment on them and he (Note: This is a continuation of the Serial Problem: Kate's Cards from Chapters / through 6. SP7. On February 15, 2019. Kate Collins, owner of Kate's Cards, asks you to investigar dling activities in her business. She believes that a new employee might be stealing for proof," she says, "but I'm fairly certain that the January 31, 2019, undeposited rece more than $12,000, although the January 31 bank reconciliation prepared by the cashier in the treasurer's department) shows only $7.238.40. Also, the January bank reconcili show several checks that have been outstanding for a long time. The cashier told me that needn't appear on the reconciliation because he had notified the bank to stop payment on the had made the necessary adjustment on the books. Does that sound reasonable to you? At your request, Kate shows you the following (unaudited) January 31, 2019, bank reconcilia prepared by the cashier: Kate's Cards $10,893.89 Ending balance from bank statement... Add: Deposits in transit...... KATE'S CARDS Bank Reconciliation January 31, 2019 $ 4,843.69 Balance from general ledger ... 7.238.40 $12,082.09 Less: Bank service charge........ $ 60.00 Unrecorded credit . . . . . . . . . . 1,200.00 (1,260.00 Less: Outstanding checks: No. 2351 No. 2353 .. No. 2354 ... Reconciled cash balance.......... $1,100.20 578.32 969.68 (2,448.20) $ 9,633.89 $ 9,633.89 Reconciled cash balance...... discover that the $1,200 unrecorded bank credit represents a note collected by the bank on e behalf: it appears in the deposits column of the January bank statement. Your investigation also le that the December 31, 2018, bank reconciliation showed three checks that had been outstanding nger than 10 months: No. 1432 for $600, No. 1458 for $466.90, and No. 1512 for $253.10. You also discover that these items were never added back into the Cash account in Kate's books. In confirming that the checks shown on the cashier's January 31 bank reconciliation were outstanding on that date, you discover that check No. 2353 was actually a payment of $1.658.32 and had been recorded on the books for that amount. To confirm the amount of undeposited receipts at January 31, you request a bank statement for February 1-12 (called a cutoff bank statement). This indeed shows a January 1 deposit of $7,238.40. Required a. Calculate the amount of funds stolen by the employee. b. Describe how the employee concealed the theft. c. What suggestions would you make to Kate about cash control procedures? EXTENDING YOUR KNC REPORTING AND ANALYSIS EYK7-1. Financial Rep mancial Reporting Problem: Columbia Sportswear Company The financial statements for bumbia Sportswear Company can be found in Appendix A at the end of this book, Required waamnanying notes to the financial statements to answer the
