None (Bank transfer schedule; kiting) The LMN Company maintains three bankaccounts: City Bank-Regular, City Bank - Payroll, and Metro Bank - Special.Your analysis of cash disbursements records for the period June 23 to July 6reveals the following bank transfers:Check No.Date of Check Bank DrawnPayeeAmountOn2476June 23RegularPayroll$100,0002890June 25RegularPayroll200,0003140June 28RegularSpecial100,000A1006June 29SpecialPayroll50,000A1245June 30SpecialRegular25,0003402June 30RegularSpecial125,000You determine the following facts about each of the first five checks: (1) the dateof the cash disbursements journal entry is the same as the date of the check, (2)the payee receives the check two days later, (3) the payee records and depositsthe check on the day it is received, and (4) it takes five days for a depositedcheck to clear banking channels and be paid by the bank on which it is drawn.Check 3402 was not recorded as a disbursement until July 1. This check waspicked up by the payee on the date it was issued, and it was included in thepayee's after-hours bank deposit on June 30.Requireda. What are the purposes of the audit of bank transfers?b. Prepare a bank transfer schedule as of June 30.c. Prepare separate adjusting entries for any checks that require adjustment.d. In the reconciliation for the three bank accounts, indicate the check numbersthat should appear as (1) an outstanding check or (2) a deposit in transit.e. Which check(s) may be indicative of kiting?

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(Bank transfer schedule; kiting) The LMN Company maintains three bank accounts: City Bank-Regular, City Bank - Payroll, and Metro Bank - Special. Your analysis of cash disbursements records for the period June 23 to July 6 reveals the following bank transfers: Check No. Date of Check Bank Drawn Payee Amount On 2476 June 23 Regular Payroll $100,000 2890 June 25 Regular Payroll 200,000 3140 June 28 Regular Special 100.000

(Bank transfer schedule; kiting) The LMN Company maintains three bank accounts: City Bank-Regular, City Bank - Payroll, and Metro Bank - Special. Your analysis of cash disbursements records for the period June 23 to July 6 reveals the following bank transfers: Check No. Date of Check Bank Drawn Payee Amount On 2476 June 23 Regular Payroll $100,000 2890 June 25 Regular Payroll 200,000 3140 June 28 Regular Special 100.000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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