The records of Lumberjack Company indicate a July 31 cash balance of $9,806.05, which includes undeposited receipts
Question:
On July 3, the cashier resigned, effective at the end of the month. Before leaving on July 31, the cashier prepared the following bank reconciliation:
Subsequently, the owner of Lumberjack Company discovered that the cashier had stolen an unknown amount of undeposited receipts, leaving only $5,000 to be deposited on July 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 Lumberjack 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.
Step by Step Answer:
Financial Accounting An Integrated Statements Approach
ISBN: 978-0324312119
2nd Edition
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren