Review the internal controls over cash receipts by mail presented in the chapter. Exactly what is accomplished by the final step in the process, performed by the controller?
> List some common examples of other receivables, besides accounts receivable and notes receivable.
> At September 30, 2018, the accounts of Spring Mountain Medical Center (SMMC) include the following: Accounts Receivable ………………â
> Consider the following transactions for TLC Company. Journalize all transactions for TLC Company. Round all amounts to the nearest dollar. 2018 Dec. 6 Received a $8,000, 90-day, 9% note in settlement of an overdue accounts receivable from Forest Mu
> Super Mart, a regional convenience store chain, maintains milk inventory by the gallon. The first month’s milk purchases and sales at its Freeport, Florida, location follow: Requirements: 1. Determine the amount that would be reported
> Logan Realty loaned money and received the following notes during 2018. Requirements: 1. Determine the maturity date and maturity value of each note. 2. Journalize the entries to establish each Note Receivable and to record collection of principal and
> Relax Recliner Chairs completed the following selected transactions: Record the transactions in the journal of Relax Recliner Chairs. Explanations are not required. (Round to the nearest dollar.) 2018 Jul. 1 Sold merchandise inventory to Go-Mart, r
> Dialex Watches completed the following selected transactions during 2018 and 2019: Requirements: 1. Open T-accounts for Allowance for Bad Debts and Bad Debts Expense, assuming the accounts begin with a zero balance. Record the transactions in the gener
> On August 31, 2018, Forget-Me-Not Floral Supply had a $140,000 debit balance in Accounts Receivable and a $5,600 credit balance in Allowance for Bad Debts. During September, Forget-Me-Not made the following transactions: • Sales on account, $530,000. Ign
> The comparative financial statements of Newton Cosmetic Supply for 2018, 2017, and 2016 include the data shown here: Requirements: 1. Compute these ratios for 2018 and 2017: a. Acid-test ratio (Round to two decimals.) b. Accounts receivable turnover (R
> The comparative financial statements of Norfolk Cosmetic Supply for 2018, 2017, and 2016 include the data shown here: Requirements: 1. Compute these ratios for 2018 and 2017: a. Acid-test ratio (Round to two decimals.) b. Accounts receivable turnover (
> Consider the following transactions for CC Publishing. Journalize all transactions for CC Publishing. Round all amounts to the nearest dollar. 2018 Dec. 6 Received a $18,000, 90-day, 6% note in settlement of an overdue accounts receivable from Go G
> Carley Realty loaned money and received the following notes during 2018. Requirements: 1. Determine the maturity date and maturity value of each note. 2. Journalize the entries to establish each Note Receivable and to record collection of principal and
> Sleepy Recliner Chairs completed the following selected transactions: Record the transactions in the journal of Sleepy Recliner Chairs. Explanations are not required. (Round to the nearest dollar.) 2018 Jul. 1 Sold merchandise inventory to Stan-Mar
> Delta Watches completed the following selected transactions during 2018 and 2019: Requirements: 1. Open T-accounts for Allowance for Bad Debts and Bad Debts Expense, assuming the accounts begin with a zero balance. Record the transactions in the genera
> Match the accounting terms with the corresponding definitions. 1. Specific identification a. Treats the oldest inventory purchases as the first units sold. 2. Materiality concept b. Requires that a company report enough information for 3. Last-in, f
> At September 30, 2018, the accounts of Green Terrace Medical Center (GTMC) include the following: Accounts Receivable ………………â&#
> On August 31, 2018, Bouquet Floral Supply had a $140,000 debit balance in Accounts Receivable and a $5,600 credit balance in Allowance for Bad Debts. During September, Bouquet made: • Sales on account, $550,000. Ignore Cost of Goods Sold. • Collections o
> Crystal Clear Cleaning uses the allowance method to estimate bad debts. Consider the following April 2019 transactions for Crystal Clear Cleaning: Requirements: 1. Prepare all required journal entries for Crystal Clear. Omit explanations. 2. Show how n
> Dylan worked for a propane gas distributor as an accounting clerk in a small Midwestern town. Last winter, his brother Mike lost his job at the machine plant. By January, temperatures were sub-zero, and Mike had run out of money. Dylan saw that Mike’s ac
> Use Target Corporation’s Fiscal 2015 Annual Report and the Note 9 data on “Credit Card Receivables Transaction” to answer the following questions. Visit http://www.pearsonhighered.com/Horngren to view a link to Target Corporation’s annual report. Requir
> Abanaki Carpets reported the following amounts in its 2018 financial statements. The 2017 figures are given for comparison. Requirements: 1. Calculate Abanaki’s acid-test ratio for 2018. (Round to two decimals.) Determine whether Aban
> Professional Steam Cleaning performs services on account. When a customer account becomes four months old, Professional converts the account to a note receivable. During 2018, the company completed the following transactions: Record the transactions in
> The following selected transactions occurred during 2018 and 2019 for Baltic Importers. The company ends its accounting year on September 30. Journalize all required entries. Make sure to determine the missing maturity date. Round to the nearest dollar
> On September 30, 2018, Team Bank loaned $94,000 to Kendall Warner on a one-year, 6% note. Team’s fiscal year ends on December 31. Requirements: 1. Journalize all entries for Team Bank related to the note for 2018 and 2019. 2. Which party has a a. note r
> Endurance Running Shoes reports the following: Journalize all entries required for Endurance Running Shoes. 2018 May 6 Recorded credit sales of $102,000. Ignore Cost of Goods Sold. Jul. 1 Loaned $18,000 to Jerry Paul, an executive with the company,
> How is inventory turnover calculated, and what does it measure?
> During August 2018, Lima Company recorded the following: • Sales of $133,300 ($122,000 on account; $11,300 for cash). Ignore Cost of Goods Sold. • Collections on account, $106,400. • Write-offs of uncollectible receivables, $990. • Recovery of receivable
> At December 31, 2018, the Accounts Receivable balance of GPS Technology is $200,000. The Allowance for Bad Debts account has a $24,110 debit balance. GPS Technology prepares the following aging schedule for its accounts receivable: Requirements: 1. Jou
> At January 1, 2018, Hilltop Flagpoles had Accounts Receivable of $28,000, and Allowance for Bad Debts had a credit balance of $3,000. During the year, Hilltop Flagpoles recorded the following: a. Sales of $185,000 ($164,000 on account; $21,000 for cash).
> At January 1, 2018, Hilltop Flagpoles had Accounts Receivable of $28,000, and Allowance for Bad Debts had a credit balance of $3,000. During the year, Hilltop Flagpoles recorded the following: a. Sales of $185,000 ($164,000 on account; $21,000 for cash).
> On June 1, 2018, Best Performance Cell Phones sold $21,000 of merchandise to Anthony Trucking Company on account. Anthony fell on hard times and on July 15 paid only $5,000 of the account receivable. After repeated attempts to collect, Best Performance f
> Steller Corporation had the following transactions in June: Requirements: 1. Journalize the transactions. Ignore Cost of Goods Sold. Omit explanations. 2. Post the transactions to the general ledger and the accounts receivable subsidiary ledger. Assume
> Suppose The Right Rig Dealership is opening a regional office in Omaha. Cary Regal, the office manager, is designing the internal control system. Regal proposes the following procedures for credit checks on new customers, sales on account, cash collectio
> Unique Media Sign Incorporated sells on account. Recently, Unique reported the following figures: Requirements: 1. Compute Unique’s days’ sales in receivables for 2018. (Round to the nearest day.) 2. Suppose Unique&a
> Match the terms with their correct definition. Terms Definitions 1. Accounts receivable a. The party to a credit transaction who takes on an obligation/payable. b. The party who receives a receivable and will collect cash in the future. 2. Other rec
> Pauline’s Pottery has always used the direct write-off method to account for uncollectibles. The company’s revenues, bad debt write-offs, and year-end receivables for the most recent year follow: The business is appl
> When does an inventory error cancel out, and why?
> Weddings on Demand sells on account and manages its own receivables. Average experience for the past three years has been as follows: Sales ……………………………………….……..……………………………………..$ 350,000 Cost of Goods Sold …………………….…….…………………………………………210,000 Bad Debts Ex
> Canyon Canoe Company has experienced rapid growth in its first few months of operations and has had a significant increase in customers renting canoes and purchasing T-shirts. Many of these customers are asking for credit terms. Amber and Zack Wilson, st
> Buffalo Wild Wings, Inc. owns and operates more than 550 Buffalo Wild Wings, R Taco, and Pizza Rev restaurants. Additionally, the corporation has franchised restaurants in both the United States and Canada. The corporation takes internal control responsi
> Answer the following questions about the controls in bank accounts: Requirements: 1. Which bank control protects against forgery? 2. Which bank control reports the activity in the customer’s account each period? 3. Which bank control confirms the amount
> A purchasing agent for Franklin Office Supplies receives the goods that he purchases and also approves payment for the goods. Requirements: 1. How could this purchasing agent cheat his company? 2. How could Franklin avoid this internal control weakness?
> The Cash account of Guard Dog Security Systems reported a balance of $2,540 at December 31, 2018. There were outstanding checks totaling $400 and a December 31 deposit in transit of $100. The bank statement, which came from Park Cities Bank, listed the D
> Smythe Banners reported the following figures in its financial statements: Cash ……………………………………………………………………………..…………….. $ 26,500 Cash Equivalents ………………………………..………………………………………………5,000 Total Current Liabilities ………………………………………………………………….…30,000 Compute t
> Review your results from preparing Guard Dog Security System’s bank reconciliation in Short Exercise S7-9. Journalize the company’s transactions that arise from the bank reconciliation. Include an explanation with each entry.
> For each timing difference listed, identify whether the difference would be reported on the book side of the reconciliation or the bank side of the reconciliation. In addition, identify whether the difference would be an addition or subtraction. a. Depo
> Restaurants do a large volume of business by credit and debit cards. Suppose summer, Sand, and Castles Resort restaurant had these transactions on January 28, 2018: National Express credit card sales ………………………………………………………..$ 10,800 Value Card debit card
> What is the effect on cost of goods sold, gross profit, and net income if ending merchandise inventory is understated?
> Prepare the journal entries for the following petty cash transactions of Everly Gaming Supplies: Mar. 1 Established a petty cash fund with a $250 balance. 31 The petty cash fund has $24 in cash and $235 in petty cash tickets that were issued to pay
> Sandra Kristof sells furniture for McKinney Furniture Company. Kristof is having financial problems and takes $650 that she received from a customer. She rang up the sale through the cash register. What will alert Megan McKinney, the controller, that som
> Internal controls are designed to safeguard assets, encourage employees to follow company policies, promote operational efficiency, and ensure accurate accounting records. Requirements: 1. Which objective do you think is most important? 2. Which objecti
> What are the steps taken to ensure control over purchases and payments by check?
> How do businesses control cash receipts by mail?
> How do businesses control cash receipts over the counter?
> What are some limitations of internal controls?
> What is the difference between an internal auditor and external auditor?
> What are the five components of internal control? Briefly explain each component.
> What account is debited when recording the adjusting entry to write down merchandise inventory under the LCM rule?
> The Davis Lamp Company (DLC) is a wholesale company that purchases lamps from the manufacturer and resells them to retail stores. The company has three inventory items: desk lamps, table lamps, and floor lamps. DLC uses a perpetual inventory system, FIFO
> Chitika, Inc. provided online tracking tools on websites. When consumers clicked the “opt-out” button, indicating that they did not want to be tracked, they were not – for ten days. After that, the software would resume tracking. Is there a legal problem
> Barrow was a government employee. Because he shared his office computer with another worker, he brought in his personal computer from home to use for office work. No other employee accessed it, but it was connected to the office network. The computer was
> An undercover drug informant learned from a mutual friend that Philip Friedman “knew where to get marijuana.” The informant asked Friedman three times to get him some marijuana, and Friedman agreed after the third request. Shortly thereafter Friedman sol
> Irving was a lawyer who prepared income tax returns for Maroevich. Irving agreed to draft a will for Maroevich, leaving all of the property to Maroevich’s sister, Biakanja. When Maroevich died, the probate court refused to accept the will because Irving
> When Thomas and Susan Tamplin were shopping at Star Lumber with their six-year-old daughter Ann Marie, a 150-pound roll of vinyl flooring fell on the girl, seriously injuring her head and pituitary gland. Ann was clearly entitled to recover for the physi
> A new truck, manufactured by General Motors Corp., (GMC) stalled in rush hour traffic on a busy interstate highway because of a defective alternator, which caused a complete failure of the truck’s electrical system. The driver stood nearby and waved traf
> Caldwell was shopping in a K-Mart store, carrying a large purse. A security guard observed her look at various small items such as stain, hinges, and antenna wire. On occasion she bent down out of sight of the guard. The guard thought he saw Caldwell put
> You are a vice-president in charge of personnel at a large manufacturing company. In-house detectives inform you that Gates, an employee, was seen stealing valuable computer equipment. Gates denies the theft, but you believe the detectives and fire him.
> Van is brought to the police station for questioning about a shooting at a mall. The police read him his Miranda rights. For the rest of the three-hour interrogation, he remains silent except for a few one word responses. Has he waived his right to remai
> Over the course of 10 months, Joseph Melle sent more than 60 million unsolicited email advertisements to AOL members. What charges could be brought against him? Would you need more information before deciding?
> Sixteen-year-old Travis Mitchell brought his Pontiac GTO into M&M Precision Body and Paint for body work and a paint job. M&M did the work and charged $1,900, which Travis paid. When, Travis later complained about the quality of the work, M&M did some to
> The McAllisters had several serious problems with their house, including leaks in the ceiling, a buckling wall, and dampness throughout. They repaired the buckling wall by installing I-beams to support it. They never resolved the leaks and the dampness.
> Raymond Barrows owned a 17-acre parcel of undeveloped land in Seaford, Delaware. For most of his life Mr. Barrows had been an astute and successful businessman, but by the time he was 85 years old, he had been diagnosed as “very senile and confused 90 pe
> Morell bought a security guard business from Conley, including the property on which the business was located. Neither party knew that underground storage tanks were leaking and contaminating the property. After the sale, Morell discovered the tanks and
> Hasbro used to manufacture a toy called “Wonder World Aquarium”. The toy included a powder that, when mixed with water, formed a gel that filled a plastic aquarium. Children could then place plastic fish in the aquarium and create underwater scenes. C
> During the Spanish-American War, the United States blockaded Cuba. It seized two commercial fishing vessels sailing under a Spanish flag off the Cuban coast. The crew knew nothing about the war and had no arms on board. U.S. officials auctioned off the
> Roy Newburn borrowed money and bought a $49,000 truck from Treadwell Ford. A few months later the truck developed transmission problems. Newburn learned that the truck had 170,000 more miles on it than the odometer indicated. The company admitted the mil
> On television and in magazines, Maurine and Mamie Mason saw numerous advertisements for Chrysler Fifth Avenue automobiles. The ads described the car as “luxurious,” “quality-engineered,” and “reliable.” When they went to inspect the car, the salesman tol
> Ramona Fricosu was indicted on charges of real estate fraud. During a legal search of her home, the police found a computer with encrypted files. Would it be a violation of her Fifth Amendment right against self-incrimination to force her to unencrypt th
> Richard and Michelle Kommit traveled to New Jersey to have fun in the casinos. While in Atlantic City, they used their MasterCard to withdraw cash from an ATM conveniently located in the “pit” - the gambling area of a casino. They ran up debts of $5,500
> Jerome Schneider wrote several books on how to avoid taxes. These books were sold on Amazon.com. Amazon permits visitors to post comments about items for sale. Amazon’s policy suggests that these comments should be civil (e.g., no profanity or spiteful r
> Brockwell left his boat to be repaired at Lake Gaston Sales. The boat contained electronic equipment and other personal items. Brockwell signed a form stating that Lake Gaston had no responsibility for any loss to any property in or on the boat. Brockwel
> For 20 years, Art’s Flower Shop relied almost exclusively on advertising in the yellow pages to bring business to its shop in a small West Virginia town. One year the yellow pages printer accidentally omitted to print Art’s ad, and Art’s suffered an enor
> While conducting a valid search of a computer for evidence of a murder, a police officer discovered child pornography. Is that evidence admissible, even though the warrant was limited to a search relating to the murder?
> Oasis Waterpark, located in Palm Springs, California, sought out Hydrotech Systems, Inc., a New York corporation, to design and construct a surfing pool. Hydrotech replied that it could design the pool and sell all the necessary equipment to Oasis, but c
> 810 Associates owned a 42-story skyscraper in midtown Manhattan. The building had a central station fire alarm system, which was monitored by Holmes Protection. A fire broke out and Holmes received the signal. But Holmes’s inexperienced dispatcher misund
> Lou DiBella was an executive responsible for programming boxing shows on HBO cable network. DiBella signed Bernard Hopkins, the then–middleweight world boxing champion, to participate in a fight televised by HBO. After DiBella’s departure from the networ
> Guyan Machinery, a West Virginia manufacturing corporation, hired Albert Voorhees as a salesman and required him to sign a contract stating that if he left Guyan he would not work for a competing corporation anywhere within 250 miles of West Virginia for
> Melnick built a house for Gintzler, but the foundation was defective. Gintzler agreed to accept the foundation if Melnick guaranteed to make future repairs caused by the defects. Melnick agreed but later refused to make any repairs. Melnick argued that h
> Jack Tallas came to the United States from Greece in 1914. He lived in Salt Lake City for nearly 70 years, achieving great success in insurance and real estate. During the last 14 years of his life, his friend Peter Dementas helped him with numerous pers
> Dr. Ibrahim Khan caused an automobile accident in which a fellow physician, Dolly Yusufji, became a quadriplegic. Khan signed a contract for the lifetime support of Yusufji. When he refused to make payments under the contract, she sued him and obtained a
> Roommates.com operated a website designed to match people renting spare rooms with those looking for a place to live. Before subscribers could search listings or post housing opportunities on Roommate’s website, they had to create profiles, a process tha
> Officer Trottier stopped Marie Winfield for driving 20 miles over the speed limit. He then became suspicious because her son would not make eye contact and she was eating a Powerbar in a “hurried manner.” The officer asked for and Winfield granted him pe
> Sami walks into a restaurant. She is given a menu, which indicates that lobster is $30. Sami orders the lobster. It arrives, and Sami thinks it is very tasty. When the bill arrives, Sami tries to execute a clever ploy she learned about in her busines
> American Bakeries had a fleet of over 3,000 delivery trucks. Because of the increasing cost of gasoline, the company was interested in converting the trucks to propane fuel. It signed a requirements contract with Empire Gas, in which Empire would convert
> In the bleachers… “You’re a prince, George!” Mike exclaimed. “Who else would give me a ticket to the big game?” “No one, Mike, no one.” “Let me offer my thanks. I’ll buy you a beer!” “Ah,” George said. “A large beer would hit the spot right now.”
> CeCe Hylton and Edward Meztista, partners in a small advertising firm, agreed to terminate the business and split assets evenly. Meztista gave Hylton a two-page document showing assets, liabilities, and a bottom line of $35,235.67, with one half due to e
> In Japan, automobile GPS systems come equipped with an option for converting them into televisions so that drivers can watch their favorite shows, yes, while driving. “We can’t help but respond to our customers’ needs,” says a company spokesperson. Alth
> Leslie Bergh and his two brothers, Milton and Raymond, formed a partnership to help build a fancy saloon and dance hall in Evanston, Wyoming. Later, Leslie met with his friend and drinking buddy, John Mills, and tricked Mills into investing in the saloon
> The day after Thanksgiving, known as Black Friday, is the biggest shopping day of the year. One major retailer advertised a “Black Friday only” laptop for $150. On Thanksgiving night, hundreds of people waited for the store to open to take advantage of t
> Case law tells us that a course syllabus is not a binding contract—but how about your school’s honor code? Under what conditions could an honor code be a contract?
