The records of Diamondale Company indicate a May 31 cash balance of $10,550, which includes undeposited receipts for May 30 and 31. The cash balance on the bank statement as of May 31 is $8,575. This balance includes a note of $5,000 plus $200 interest collected by the bank but not recorded in the journal. Checks outstanding on May 31 were as follows: No. 670, $900; No. 679, $750; No. 690, $1,650; No. 1148, $225; No. 1149, $300; and No. 1151, $600.
On May 3, the cashier resigned effective at the end of the month. Before leaving on May 31, the cashier prepared the following bank reconciliation:

Subsequently, the owner of Diamondale Company discovered that the cashier had stolen an unknown amount of undeposited receipts, leaving only $1,000 to be deposited on May 31. The owner, a close family friend, has asked your help in determining the amount that the former cashier has stolen.
1. Determine the amount the cashier stole from Diamondale Company. Show your computations in good form.
2. How did the cashier attempt to conceal the theft?
3. a. Identify two major weaknesses in internal controls, which allowed the cashier to steal the undeposited cash receipts.
b. Recommend improvements in internal controls, so that similar types of thefts of undeposited cash receipts can beprevented.

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Cash balance per books, May 31 Add outstanding checks: . . . .. .. . . . . $10,550 $225 300 600 1,025 $11,575 3,000 5 8,575 5,200 3,375 Cash balance per bank, May 31...... Deduct unrecorded note with interest . . . . .. .. . . . . . . Calculator Tape of Outstanding Checks: 225 300+ 600+ 1,025