The Records of Ananas Company indicate a March 31 cash balance of Sh. 9,400,000 which includes undeposited receipts for March 30 and 31. The cash balance on the bank statements as of March 31 is Sh. 6,575,000. This balance includes a note of Sh. 4,000,000 plus Sh. 160,000 interest collected by the bank but not recorded in the journal. Cheques outstanding (issued but not yet paid) were as follows:

#370	Shs. 580,000	#1148	Shs. 225,000
#379	615,000	#1149	300,000
#390	Shs. 900,000	#115	750,000

On March 31, the cashier resigned, effective at the end of the month. Before leaving on March 31, the cashier prepared the following bank reconciliations:

Cash balance per balance per book, March 31 Shs. 9,400,000

Add: Outstanding cheques

#1148 Sh. 225,000

#1149 300,000

#1151 750,000 1,750,000

10,575,000

Less: undepoisted receipts (4,000,000)

Cash balance per bank, March 31 6,755,000

Deduct: unrecorded note with interest (4,160,000)

True cash, March 31 2,415,000

Subsequently, the CFO of Ananas Company discovered that the cashier had stolen an unknown amount of undeposited receipts, leaving only Sh. 1,000, 0000 to be deposited on March 31. The CFO, has asked your help in determining the amount that the former cashier has stolen.

Required:

1. Determine the amount the cashier stole from Ananas Company. Show your computation in good form. (10 marks)
2. How did the cashier attempt to conceal the theft? (5 marks)
3. i) Identify two major weaknesses in internal controls, which allowed the cashier to steal the undeposited cash receipts (5marks)

ii) Recommend improvement in internal controls, so that similar types of thefts of undeposited cash receipts can be prevented. (5 marks)