Chapter 8 Cash, Fraud, and internal Controls Shamara Systems most recently recon

Question

Chapter 8 Cash, Fraud, and internal Controls Shamara Systems most recently reconciled its bank balance on April 30 and tepe formation is ing at that time, No. 1771 for $781 and No, 1780 for $1,425.90. The folkowing ts May 31, 2017, neconciliation. is avalilable for From the May 31 Bank Statement S AND DEBITS DEPOSITS AND CREDITS 05/01 1771 78100 2.438.00 05/04 05/14 2.898.00 05/22 1801.80 05/257,35000 cM 05/262.07900 05/02 1783 382.50 0504 2 t28550 05/11 1784 1,449.60 431.80 NS 05/25 1787 8.032.50 05/26 1785 63.90 05/29 1788 654.00 05/31 14.00 SC From Shamara Systems's Accounting Records Cash Receipts Deposited Cash Disbursements 1782 1783 1784 1785 1786 1787 1788 1789 1,285.50 May4 14 2.898.00 1,801.80 2.079.00 2.27 30 382.50 449.60 63.90 353.10 8,032.50 644.00 639.50 12.850.60 26 31 11.944.10 Acct. No. 101 Date Explanatiorn PR Debit 16,083.80 Apr. 30 Balance May 31 Total receipts R7 11,944. 10 08 8,027.90 12.850.60 15,177.30 311 Total disbursements Additional Information Check No. 1788 is correctly drawn for $654 to pay for May utilities: however, the recordkeeper misread the amount and entered it in the accounting records with a debit to Uitilities Expense and a credit to Cash for $644. The bank paid and deducted the correct amount. The NSF check shown in the statement

Explanation / Answer

Part 1 SHAMARA SYSTEMS Bank Reconciliation May 31, 2017 Bank statement balance $21,762.70 Book balance $15,177.30 Add Add Deposit of May 31     2,727.30 Proceeds of note less $50 fee $7,350.00 $7,350.00    24,490.00 $22,527.30 Deduct Deduct NSF check     431.80 Checks No. 1780 $ 1,425.90 Error (Check 1788)      10.00 1786       353.10 Bank Charges $14.00 1789       639.50     2,418.50            455.80 Adjusted bank balance $22,071.50 Adjusted book balance $22,071.50 Part 2 Sept. 30 Bank Charges         14.00 Cash          14.00 To record bank charges Sept. 30 Cash    7,350.00 Collection Expense         50.00 Notes Receivable     7,400.00 To record note collection less fee Sept. 30 Accounts Receivable— W.Sox       431.80 Cash        431.80 To charge account for NSF check plus fee Sept. 30 Utilities Expense         10.00 Cash          10.00 To correct an entry error Part 3 Possible Resons: Check is cancelled. Check is outstanding and not presented in bank. Check is not delivered to vendor.

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