Kim Lee, the bookkeeper for Briton Company, had never missed a day’s work for the past ten years until last week. Since that time, he has not been located. You now suspect that Kim may have embezzled money from the company. The following bank reconciliation, prepared by Kim last month, is available to help you determine if a theft occurred:

In examining the bank reconciliation, you decide to review canceled checks returned by the bank. You find that check stubs for check nos. 201, 204, 205, and 295 indicate that these checks were supposedly voided when written. All other bank reconciliation data have been verified as correct. 1. Compute the amount suspected stolen by Kim. 2. Interpretive Question: Describe how Kim accounted for the stolen money. What would have prevented the theft?

Transcribed Image Text:

Briton Company Bank Reconciliation for August 2003 Prepared by Kim Lee Balance per bank statement..... $192,056 Additions to bank balance: Deposits in transit. Deductions from bank balance: Balance per books... $169,598 Additions to book balance: 8,000 Note collected by bank 250 Interest earned Deductions from book balance: 600 NSF check.. (19,200) Bank service charges. (5,000) (4,058) (195) (1,920) (615) Outstanding checks: #201 #204 #205 #295 #565 #567 # 568 (468) Adjusted bank balance $168,600 (1,800) (48) Adjusted book balance. $168,600