The question is, Indicate the three ways that Bret attempted to conceal the theft and the dollar amount involved in each method. Scenario: Daisey 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 book-keeper. As a result, Bret Turrin handles all cash receipts, keeps the accounting records, and prepares the monthly bank reconciliations.

The balance per the bank statement on October 31, 2017, was $18,380. Outstanding checks were No. 62 for $140.75, No. 183 for $180, No. 284 for $253.25, No. 862 for $190.71, No. 863 for $226.80, and No. 864 for $165.28. Included with the statement was a credit memorandum of $185 indicating the collection of a note receivable for Daisey Company by the bank on October 25.

This memorandum has not been recorded by Daisey.

The company's ledger showed one Cash account with a balance of $21,877.72. The balance included undepositied cash on hand. Because of the lack of internal controls, Bret took for personal use all of the undeposited receipts in excess of $3,795.51. He then prepared the following bank reconciliation in an effort to conceal his theft of cash:

Cash balance per books, October 31 $21,877.72
Add: Outstanding checks
No. 862$190.71
No. 863226.80
No. 864165.28482.79
22,360.51
Less: Undeposited receipts 3,795.51
Unadjusted balance per bank, October 31 18,565.00
WRITTEN BELOW IS THE CORRECTION TO THE BANK RECONCILIATION.

No.

Amount

No.

Amount

No.62

$140.75

No. 862

$190.71

No.183

$180.00

No.863

$226.80

No. 284

$253.25

No. 864

$165.28

Total Outstanding Checks

$1,156.79

Adjusted Balance Per Bank

$21,018.72

My answer to the Bank Reconciliation below is:

Indicate the three ways that Bret attempted to conceal the theft and the dollar amount involved in each method.

$18,380.00

DAISEY COMPANY

Bank Reconciliation

October 31, 2017

Balance as Per Bank Statement

$18,380.00

Added Undeposited Receipts

$3,795.51

Less Outstanding Checks

No.

Amount

No.

Amount

No.62

$140.75

No. 862

$190.71

No.183

$180.00

No.863

$226.80

No. 284

$253.25

No. 864

$165.28

Total Outstanding Checks

$1,156.79

Adjusted Balance Per Bank

$21,018.72

Cash Balance Per Bank

$21,877.72

Add Bank Credit (Collection of Notes Receivable)

Receivable)

$185.00

Adjusted Balance Per books before Theft

$22,062.72

Less Value of Theft (22062.72 - 21018.72)

$1,044.00

Adjusted Balance Per Books

$21,018.72