- Monday Ltd has not implemented an internal control system over its cash. The Manager of Monday Ltd suspects that the cashier Mr. Benjo is stealing money from the company. Here are some details of company cash at 31 July:
The Cash account in the ledger shows a balance of $20 000.Ø The 31 July bank statement shows a balance of $25 000.
- The bank statement lists a $8 000 bank collection, a $500 service charge and interest revenue of $2 000 which have not been recorded by Monday Ltd.
- The bank statement included a dishonoured cheque from a customer of $3 500.
- At 31 July, the following cheques are outstanding:
There is a $3 000 deposit in transit at 31 July.Ø The bank statement includes a $200 payment belonging to ABX Ltd, an unrelated company. This is a bank error.
- There are no other bank or book errors.
The duties of Mr Benjo the cashier, include receiving, recording and depositing the cash. He also writes cheques and reconciles the monthly bank statement. The Manager has asked you to determine whether the cashier has stolen cash from the business and, if so, how much.
(a) Perform the bank reconciliation at 31 July and the workings summarising the adjustments to the Cash account in the general ledger for Monday Ltd.
(b) Determine whether the cashier has stolen cash from the business and, if so, state how much.