The Farmington Chamber of Commerce recently hired you as an accounting assistant. On assuming your position on September 15, one of your first tasks was to reconcile the August bank statement. Your immediate supervisor, Ms. Robitelli, had been in charge of nearly all accounting tasks, including paying bills, preparing the payroll, and recording all transactions in the books. She has been very helpful to you, providing assistance on all the tasks she has asked you to do. The reconciliation was no different. Without assistance, you were able to locate the following information from the bank statement and the Chamber’s books:
Balance per books ............ $16,610
Balance per bank statement ......... 16,600
Bank service charges ............. 30
NSF check returned ........... 3,000
Deposits in transit ............ 4,600
Outstanding checks ............ 9,850
You also found a deposit on the bank statement of $3,300 that was incorrectly recorded as $3,030 on the Chamber’s books.
When you could not reconcile the book and bank balances, you asked Ms. Robitelli for help. She responded that an additional $2,500 deposit was in transit.
1. Assume the information you obtained without Ms. Robitelli’s help is accurate and complete. Prepare the August bank reconciliation with the original information, showing that the book and the bank balances do not reconcile.
2. Prepare a reconciliation using the new number, $7,100, for deposits in transit.
3. Why might Ms. Robitelli have instructed you to add $2,500 to the deposits in transit? What might she be trying to hide? If there were deceit, when might it be discovered?
4. What actions would you take if you were the accounting assistant?
5. By coincidence, you noticed a $2,500 cancelled check, signed by Ms. Robitelli, to an individual whose name you did not recognize. How would this change your answer to number 4?

  • CreatedFebruary 20, 2015
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