Solved: Stupendous Company is a very profitable small

business It has
Stupendous Company is a very profitable small business It has

Stupendous Company is a very profitable small business. It has not, however, given much
consideration to internal control. For example, in an attempt to keep clerical and office expenses
to a minimum, the company has combined the jobs of cashier and bookkeeper. As a result,
Jake Burnett handles all cash receipts, keeps the accounting records, and prepares the monthly
bank reconciliations. The balance per the bank statement on October 31, 2014, was $15,313.
Outstanding checks were: no. 62 for $107.74, no. 183 for $127.50, no. 284 for $215.26, no. 862
for $132.10, no. 863 for $192.78, and no. 864 for $140.49. Included with the statement was a
credit memorandum of $460 indicating the collection of a note receivable for Stupendous
Company by the bank on October 25. This memorandum has not been recorded by Stupendous
Company. The company's ledger showed one cash account with a balance of $18,608.81. The
balance included undeposited cash on hand. Because of the lack of internal controls, Burnett
took for personal use all of the undeposited receipts in excess of $3,226.18. He then prepared
the following bank reconciliation in an effort to conceal his theft of cash.

Instructions
(a) Prepare a correct bank reconciliation.
(b) Indicate the three ways that Burnett attempted to conceal the theft and the dollar amount
pertaining to each method.
(c) What principles of internal control were violated in thiscase?

Stupendous Company is a very profitable small business It has

ANSWER
https://solvedquest.com/stupendous-company-is-a-very-profitable-small-business-it-has/

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