Forensic Accounting Chapter 6

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Unformatted text preview: 1, 2002 – July 31, 2004 Identify Mr. Jerardo’s Identify From there we must subtract all his This will establish his total WORTH Less WORTH) WORTH) This will reveal the This Increase in YEAR YEAR To that we ADD all The result will be The ASSESTS (LIABILITIES) NET WORTH CURRENT YEAR NET (PRIOR YEAR NET NET WORTH from PREVIOUS KNOWN EXPENSES FUNDS from UNKOWN Steven J. Jerardo Steven Net Worth Analysis Financial Profile January 1, 2002 – July 31, Financial 2004 12/31/02 Assets 12/31/03 Refer To Handout 7/31/04 $49,500 $891,001 $1,234,654 $0 $188,710 $183,717 $49,500 $702,290 $1,050,936 $49,500 $702,290 $652,790 $348,646 $87,209 $104,532 Total Outlay of Funds $739,999 $453,178 Less: Known Sources of Funds $113,639 $60,335 Funds from an Unknown Source $626,361 $392,842 Less: Liabilities Net Worth Less: Prior Year's Net Worth Increase in Net Worth Plus: Personal Expenditures Steven J. Jerardo Steven Net Worth Analysis Financial Profile January 1, 2002 – July Financial 31, 2004 31, 2003 FUNDS FROM UNKNOWN SOURCES $626,361 $626,361 2004 FUNDS FROM 2004 UNKNOWN SOURCES $392,842 $392,842 GRAND TOTAL $1,019,203 Chapter 6 Forensic Accounting 41 Indirect Method #5 The Bank Deposit Method Chapter 6 Forensic Accounting 42 Bank Deposit Method This method is appropriate when most of This the income is deposited in banks and most of the expenses are paid by check. most The Bank Deposit Method was approved The by the courts almost 70 years ago. by Chapter 6 Forensic Accounting 43 Steven J. Jerardo Steven Bank Deposit Analysis Financial Profile January 1, 2002 – July 31, Financial 2004 Gross Deposits to all Accounts 2003 2004 Total Deposits 686,703.29 770,540.28 Less Total Transfers 291,504.00 399,863.00 Net Deposits to all Accounts 395,199.29 370,677.28 CASH EXPENDITURES: Total Outlay 581,798.00 250,516.00 Less Net Bank Disbursements 236,798.85 168,014.96 Equals cash Disbursements 344,999.15 82,501.04 TOTAL RECEIPTS Net Bank Deposits 395,199.29 370,677.28 6 Forensic Accounting Plus Cash Expenditures 344,999.15 Refer To Handout Chapter 44 Bank Deposit Method Step 1 – Determine Net Deposits to All Step Accounts Accounts Gross Deposits All Accounts Business Business + Personal + Children Children Total Bank Deposits means Total total deposits in all Bank Accounts. Accounts. Total Transfers – must Total eliminate all transfers between accounts and any redeposited items. items. For example when a check is For made payable to cash and the cash is used to create a change fund fund Chapter 6 Total Deposits – Total Transfers Total Total Deposits Total Less: Transfers & Redeposits Less: Transfer of Funds Deposit Check / Withdraw Deposit Cash Cash Total Transfers Total Net Deposits To All Net Accounts Accounts Forensic Accounting 45 Bank Deposit Method Step 2 – Determine Total Outlays Total Outlays includes Total all business and personal expenses paid by either cash or check. check. Do not include: Depreciation Depletion Bad Debts Chapter 6 Outlays: Business Expense Cash B...
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