Using Bank Reconciliation to Determine Cash Receipts Stolen First Impressions Co

ID: 2476963 • Letter: U

Question

Using Bank Reconciliation to Determine Cash Receipts Stolen First Impressions Co. records all cash receipts on the basis of its cash register tapes. First Impressions Co. discovered during April 20Y1 that one of its sales clerks had stolen an undetermined amount of cash receipts when she took the daily deposits to the bank. The following data have been gathered for April:

a. Determine the amount of cash receipts stolen by the sales clerk. $

Cash in bank according to the company records $8,580 Cash according to the April 30, 20Y1, bank statement 19,820 Outstanding checks as of April 30, 20Y1 5,665 Bank service charges for April 25 Note receivable, including interest collected by bank in April 9,180

Explanation / Answer

Answer:

a. Determination of the amount of cash receipts stolen by the sales clerk

Cash in bank according to the company records

$8,580

Add: Outstanding Checks as of April 30, 20Y1 (it means cheque issued by the company but not presented in the bank)

$5,665

Less: Bank Service Charges for April (Charged by bank but not entered by the company in books)

($25)

Add: Note receivable, including interest collected by bank in April (collected by bank but not entered in company's cash book)

$9,180

Cash that must be according to the April 30, 20Y1, bank statement

$23,400

Actual Cash according to the April 30, 20Y1, bank statement

$19,820

Difference between the actual cash according to bank statement and the actual cash must be by the reconciliation statement as per bank statement is the amount of cash receipts stolen by the sales clerk

$3,580