The principal Required Prepare the June bank reconciliation for the Chu Prepare any necessary adjusting entries. SERIAL PROBLEM: KATE'S CARDS estigate the cash han ve stealing funds. "I have no sited receipts amounted to e cashier (who works conciliation doesn't ier told me that these checks Kales Cards (Note: This is a continuation of the Serial Problem: Kate's Cards from Chapters 1 through SP7. On February 15, 2019. Kate Collins, owner of Kate's Cards, asks you to investigate dling activities in her business. She believes that a new employee might be stealine proof," she says, "but I'm fairly certain that the January 31, 2019. undeposited recei 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 reconcil 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 reco prepared by the cashier: hement) shows onlanding for a longed the bank te KATE'S CARDS Bank Reconciliation January 31, 2019 Balance from general ledger ... $10,893.89 Ending balance from bank statement... Add: Deposits in transit..... $ 4,843.69 7,238.40 $12,082.09 Less: Outstanding checks: No. 2351 No. 2353 ...... No. 2354 Reconciled cash balance. Less: Bank service charge. . . . . . . . $ 60.00 Unrecorded credit . . . . . . . . . . 1,200.00 (1,260.00) $1,100.20 578.32 969.68 (2,448.20) $ 9,633.89 Reconciled cash balance .... $ 9,633.89 Cambridge Business Publishers Chapter 7 Internal Control and Vou discover that the $1,200 unrecorded bank credit represents a note collected by the bank on Kate's behalf; it appears in the deposits column of the January bank statement. Your investigation also reveals that the December 31, 2018, bank reconciliation showed three checks that had been outstanding longer 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, vou 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 u What suggestions would you make to Kate about cash control procedures? EXTENDING YOUR KN