The records of Clairemont Company indicate an August 31, 2013, cash balance of $6,675, which includes undeposited receipts for August 30 and 31. The cash balance on the bank statement as of August 31 is $5,350. This balance includes a note of $3,000 plus $210 interest collected by the bank but not recorded in the journal. Checks outstanding on August 31 were as follows: No. 370, $580; No. 379, $615; No. 390, $900; No. 1148, $225; No. 1149, $300; and No. 1151, $750.

On August 9, the cashier resigned, effective at the end of the month. Before leaving on August 31, the cashier prepared the following bank reconciliation:

Subsequently, the owner of Clairemont Company discovered that the cashier had stolen an unknown amount of undeposited receipts, leaving only $2,500 to be deposited on August 31. The owner, a close family friend, has asked your help in determining the amount that the former cashier has stolen.

1. Determine the amount the cashier stole from Clairemont Company. Show your computations in good form.

2. How did the cashier attempt to conceal the theft?

3. a. Identify two major weaknesses in internal controls that allowed the cashier to steal the undeposited cash receipts.

b. Recommend improvements in internal controls, so that similar types of thefts of undeposited cash receipts can be prevented.