Identify each of the following reconciling items as:an addition to the cash balance according to the bank statementa deduction from the cash balance according to the bank statementan addition to the cash balance according to the companys recordsa deduction from the cash balance according to the companys records(None of the transactions reported by bank debit and credit memos have been recorded by the company.)ItemTreatment1. Bank service charges, $30. 2. Check of a customer returned by bank to company because of insufficient funds, $400. 3. Check for $320 incorrectly recorded by the company as $230. 4. Check for $1,100 incorrectly charged by bank as $110. 5. Deposit in transit, $3,300. 6. Outstanding checks, $7,950. 7. Note collected by bank, $10,500.Internal Control of Cash PaymentsParagon Tech Company, a communications equipment manufacturer, recently fell victim to a fraud scheme developed by one of its employees. To understand the scheme, it is necessary to review Paragon Techs procedures for the purchase of services.The purchasing agent is responsible for ordering services (such as repairs to a photocopy machine or office cleaning) after receiving a service requisition from an authorized manager. However, because no tangible goods are delivered, a receiving report is not prepared. When the Accounting Department receives an invoice billing Paragon Tech for a service call, the accounts payable clerk calls the manager who requested the service in order to verify that it was performed.The fraud scheme involves Mae Jansma, the manager of plant and facilities. Mae arranged for her uncles company, Radiate Systems, to be placed on Paragon Techs approved vendor list. Mae did not disclose the family relationship.On several occasions, Mae would submit a requisition for services to be provided by Radiate Systems. However, the service requested was really not needed, and it was never performed. Radiate Systems would bill Paragon Tech for the service and then split the cash payment with Mae.What changes should be made to Paragon Techs procedures for ordering and paying for services in order to prevent such occurrences in the future?a.Someone other than the purchasing agent should be responsible for ordering service.b.Employees should be required to disclose relationships between themselves and vendors.c.Paragon Tech must separate responsibilities for related operations.d.All of these choices are correct.e.None of these choices are correct.Entries Based on Bank ReconciliationWhich of the reconciling items listed below require an entry in the companys accounts? (None of the transactions reported by bank debit and credit memos have been recorded by the company.)ItemEntry Required1. Bank service charges. 2. NSF check returned to company by the bank. 3. Check incorrectly recorded by company. 4. Check incorrectly charged by bank. 5. Deposit in transit. 6. Outstanding checks. 7. Note collected by bank. Cash to Monthly Cash Expenses RatioAmicus Therapeutics, Inc., is a biopharmaceutical company that develops drugs for the treatment of various diseases, including Parkinson’s disease. Amicus Therapeutics reported the following financial data (in thousands) for three recent years:For Years Ended December 31 Year 3Year 2Year 1Cash and cash equivalents$69,485 $24,074 $43,640 Net cash flows from operations(100,139) (51,669) (45,794)a. Determine the monthly cash expenses for Year 3, Year 2, and Year 1 (in thousands). Round to one decimal place.Year 3:$ per monthYear 2:$ per monthYear 1:$ per monthb. Determine the ratio of cash to monthly cash expenses for Year 3, Year 2, and Year 1 as of December 31. Round to one decimal place.Year 3: monthsYear 2: monthsYear 1: monthsc. Based on (a) and (b), which of the following statements is correct.1. Amicus has been able to support its operations by issuing additional stock. However, its negative cash flows have increased from Year 1 to Year 3. 2. Amicus has been able to support its operations generating positive cash flows. Its positive cash flows have increased from Year 1 to Year 3. 3. Amicus has been able to support its operations generating positive cash flows. However the cash flows generated are used to purchase short term investment.