Case 1 Steve Ramos owns apartment buildings in Baguio City, and Tagaytay City. Each property has a manager who collects rent, arranges for repairs, and runs advertisements in the local newspaper. The property managers transfer cash to Ramos monthly and prepare their own bank reconciliations. The manager in Baguio City has been stealing large sums of money. To cover the theft, he understates the amount of the outstanding checks on the monthly bank reconciliation. As a result, each monthly bank reconciliation appears to balance. However, the balance sheet reports more cash than Ramos actually has in the bank. In negotiating the sale of the Baguio City property, Ramos is showing the balance sheet to prospective investors.
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- Steve Ramos owns apartment buildings in Baguio City, and Tagaytay City. Each property has a manager who collects rent, arranges for repairs, and runs advertisements in the local newspaper. The property managers transfer cash to Ramos monthly and prepare their own bank reconciliations. The manager in Baguio City has been stealing large sums of money. To cover the theft, he understates the amount of the outstanding checks on the monthly bank reconciliation. As a result, each monthly bank reconciliation appears to balance. However, the balance sheet reports more cash than Ramos actually has in the bank. In negotiating the sale of the Baguio City property, Ramos is showing the balance sheet to prospective investors. 1. Identify two parties other than Ramos who can be harmed by this theft. In what ways can they be harmed? 2. Discuss the role accounting plays in this situation.ACC Snake Creek Company has one trusted employee who, as the owner said, handles all of the book-keeping and paperwork for the company. This employee is responsible for counting, verifying, and recording cash receipts and payments, making the weekly bank deposit, preparing checks for major expenditures (signed by the owner), making small expenditures from the cash register for daily expenses, and collecting accounts receivable. The owners asked the local bank for a $ 20,000 loan. The bank asked that an audit be performed covering the year just ended. The independent auditor ( a local CPA), in a private conference with the owner, presented some evidence of the following activities of the trusted employee during the past year: a. Cash sales sometimes were not entered in the cash register, and the trusted employee pocketed approximately $ 50 per month. b. Cash taken from the cash register (and pocketed by the trusted employee) was replaced with expense memos with fictitious…Snake Creek Company has a trusted employee who, as the owner said, “handles all of the bookkeeping and paperwork for the company.” This employee is responsible for counting, verifying, and recording cash receipts and payments, making the weekly bank deposit, preparing cheques for major expenditures (signed by the owner), making small expenditures from the cash register for daily expenses, and collecting accounts receivable. The owner asked the local bank for a $20,000 loan. The bank asked that an audit be performed covering the year just ended. The independent auditor (a local CPA), in a private conference with the owner, presented some evidence of the following activities of the trusted employee during the past year: Cash sales sometimes were not entered in the cash register and the trusted employee pocketed approximately $50 per month. Cash taken from the cash register (and pocketed by the trusted employee) was replaced with expense memos with fictitious signatures (approximately…
- To prevent embezzlement, what can you do to protect your operation against it? a) Make bank deposits daily. b) Ensure that the individual that makes daily deposits is bonded. c) Review and approve bank statement reconciliations each month. d) All of the above e) Only a. and b. aboveIdentity Theft Resource Center (ITRC) provides consumer and victim support, public education, and advice. Marlena's grandmother is concerned her identity has been stolen. Help Marlena reconcile her grandmother's checkbook and bank statement. The checkbook reflects a balance of $1,425. The bank statement shows a balance of $363. Notes collected were $220 and $330. The bank charged a $85 service fee. Outstanding checks were No. 255, $1,165; No. 261, $437; and No. 262, $705. There is a deposit in transit of $3,834. Prepare your bank reconciliation. Checkbook balance Add: Notes collected Subtotal Deduct: Service fee Reconciled balance $ $ GA BANK RECONCILIATION 1,440 570 2,010.00 90 $ $ $ 376 3,933 4,309 1,920Identity Theft Resource Center (ITRC) provides consumer and victim support, public education, and advice. Marlena's grandmother is concerned her identity has been stolen. Help Marlena reconcile her grandmother's checkbook and bank statement. The checkbook reflects a balance of $1,245. The bank statement shows a balance of $207. Notes collected were $100 and $210. The bank charged a $25 service fee. Outstanding checks were Number 255, $985; Number 261, $233; and Number 262, $105. There is a deposit in transit of $2,646. Prepare your bank reconciliation.
- Additional data for the bank reconciliation include the following: The EFT deposit was a receipt of monthly rent. The EFT debit was a monthly insurance payment. The unauthorized signature check was received from Free Tiboy. The P68,400 bank collection of a note receivable on April 22 included P9,250 interest revenue. The correct amount of check number 4115, a payment on account, is P69,500. (Banyo De Orocan’s accountant mistakenly recorded the check for P96,500). REQUIRED: Prepare a bank reconciliation as of April 30, 2021. Prepare adjusting entries in the books of Banyo De Orocan Company.The accountant of Jonathan Manufacturing Company was tasked to perform monthly bank reconciliation. She downloaded the company's April 30 bank statement that showed a balance of P32,400. She also printed the cash ledger from the company's computerized accounting system. It contains the ending balance of P8,350. She also found the following reconciling items: a. The bank statement showed bank service fee of P800 b. The bank collected P1,500 from a note receivable for Jonathan Manufacturing. Also, a collection fee of P250 was charged. c. Deposits in transit, P51,000. d. Checks outstanding on May 31, P79,100. e. The accountant found a check issued to Rhys Corp. for P4,50 that cleared the bank but was not in the cash ledger. Required: Prepare a Bank Reconciliation StatementThe smallest branch of Super Fresh Cosmetics in Iloilo City employs Mary Santos, the branch manager, and her sales assistant, Jane Reyes. The branch uses as bank account in Iloilo City to pay expenses. The account is kept in the name of "Super Fresh Cosmetics Special Account". To pay expenses, checks must be signed by Mary Santos or by the treasurer of Super Fresh Cosmetics, Juan Dy. Mary receives the cancelled checks and bank statements. She reconciles the branch account herself and files cancelled checks and bank statements in her records. She also periodically prepares reports of cash disbursements and sends them to the home office. What are the control weaknesses you noted? Give internal control activities to prevent/detect/correct the said weaknesses.
- The smallest branch of Super Fresh Cosmetics in Iloilo City employs Mary Santos, the branch manager, and her sales assistant, Jane Reyes. The branch uses as bank account in Iloilo City to pay expenses. The account is kept in the name of "Super Fresh Cosmetics Special Account". To pay expenses, checks must be signed by Mary Santos or by the treasurer of Super Fresh Cosmetics, Juan Dy. Mary receives the cancelled checks and bank statements. She reconciles the branch account herself and files cancelled checks and bank statements in her records. She also periodically prepares reports of cash disbursements and sends them to the home office. a. What are the control weaknesses you noted? b. Give internal control activities to prevent/detect/correct the said weaknesses.a. Illustrate and record the following events on a T account John deposits his $10,000 paycheck into his checking account at Chase Bank b.Chase Bank deposits the check at the Fed and Fed collects the funds for Chase Bank c.What happens to a bank's reserves when it receives a deposit? d.John withdraws $2000 cash and pays his rent. His landlord deposits the $2000 in Citi BankSuperior Cabinets maintains a petty cash fund for minor business expenditures. The petty cashcustodian, Mo Smith, describes the events that occurred during the last two months:a. I established the fund by cashing a Superior Cabinets’ check for $300 made payable to me.b. Liz Clay provided a receipt for $50 for various supplies. I paid $50 cash to her.c. James Flyer provided a $70 taxi receipt, so I paid $70 cash to him.d. Ricky Ricota claimed to do photocopying for Superior Cabinets at The UPS Store for $97 buthad misplaced the receipt. I took him at his word and paid $97 cash to him.e. On the last day of the month, I prepared a summary of expenditures and requested the fund bereplenished. I received and cashed a Superior Cabinets’ check for $217, placing the cash intothe locked cash box.f. James Flyer provided receipts for taxi costs ($75), so I paid $75 cash to him.g. Woo Riun provided a $147 receipt from a local delivery company for an expedited delivery toa customer. I paid her $147…