lease help me with this problem. Answer requirement (a) and (b). During the audit of Sunset Building Supply, you are given the following year-end bank reconciliation prepared by the client: Balance per 12/31 bank statement: $97,468 Add: Deposits in transit: $8,934 Total $106,402 Less: Checks Outstanding $41,516 Balance Per Ledger, 12/31 $64,886 According to the client’s accounting records, checks totaling $62, 964 were issued between January 1 and January 14 of the following year. You have obtained a cutoff bank statement dated January 14 containing paid checks amounting to $100,880. Of the checks outstanding at December 31, checks totaling $7,200 were not returned in the cutoff statement, and of those issued per the accounting records in January, checks totaling $16,400 were not returned. Required: a. Prepare a working paper comparing (1) the total of all checks returned by the bank or still outstanding with (2) the total per the client’s records of checks outstanding at December 31 plus checks issued from January 1–14. b. Suggest four possible explanation for the situation disclosed in your working paper. State what action you would take in each case including any adjusting entry you would prepare.
Please help me with this problem. Answer requirement (a) and (b).
During the audit of Sunset Building Supply, you are given the following year-end bank reconciliation prepared by the client:
Balance per 12/31 bank statement: $97,468
Add: Deposits in transit: $8,934
Total $106,402
Less: Checks Outstanding $41,516
Balance Per Ledger, 12/31 $64,886
According to the client’s accounting records, checks totaling $62, 964 were issued between January 1 and January 14 of the following year. You have obtained a cutoff bank statement dated January 14 containing paid checks amounting to $100,880. Of the checks outstanding at December 31, checks totaling $7,200 were not returned in the cutoff statement, and of those issued per the accounting records in January, checks totaling $16,400 were not returned.
Required:
a. Prepare a working paper comparing (1) the total of all checks returned by the bank or still outstanding with (2) the total per the client’s records of checks outstanding at December 31 plus checks issued from January 1–14.
b. Suggest four possible explanation for the situation disclosed in your working paper. State what action you would take in each case including any
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