P$7\mathrm{.}13$A $($LO $4)$ AP Sally's Sweet Shop's August $31$ bank balance was $$11,135.$ The company's cash balance at August $31$ was $$10,805.$ Other information follows:

Cheque #$490$ was correctly written and paid by the bank for $$206.$ The cheque had been issued to pay accounts payable and the company had recorded it as $$266.$

charged to Sally's Sweet Shop's account in error.

The bank returned an NSF cheque from a customer for $$385.$

policy is to pass on all NSF processing fees to the customer.

The company's records showed the August $15$ deposit as $$4,690.$ On the bank statement, it was correctly recorded as $$4,990.$ The deposit was for cash sales.

$1.$The company recorded it in August.

Instructions

a$.$ Prepare a bank reconciliation.

b$.$ Prepare any necessary journal entries.

c$.$ What amount should be reported as cash on the August $31$ balance sheet?

employee fraud?

Calculate cash balance and report other items.