Background: Some of Crown Company's cash receipts from customers are received by the company with the regular US mail. The company's recordkeeper opens these letters and deposits the cash received each day. Required: Part 1a. Identify any internal control problem(s) with this arrangement. Explain your answer(s). Part 1b. What changes to Crown's internal control system do you recommend? Explain your answer(s). Question #2 - Internal Control Recommendations: What internal control procedures would you recommend in each of the following two situations? Required: Part 2a. A concession company has one employee who sells towels, coolers, and I ACCT110 - Cash Control Operations sunglasses at the beach. Each day, the employee is given enough towels, coolers, and sunglasses to last through the day and enough cash to make change. The money is kept in a box at the stand. Part 2b. An antique store has one employee who is given cash and sent to garage sales each weekend. The employee pays cash for any merchandise acquired that the antique store resells. Question #3: Bank reconciliation and adjustments Background: The following information is available to reconcile Branch Company's book balance of cash with its bank statement cash balance as of July 31: a. On July 31, the company's Cash account has a $27.497 debit balance, but its July bank statement shows a $27,233 cash balance. b. Check No. 3031 for $1,482 and Check No. 3040 for $558 were outstanding on the June 30 bank reconciliation c. Check No. 3040 is listed with the July canceled checks, but Check No. 3031 is not. Also, Check No. 3065 for $382 and Check No. 3069 for $2,281, both written in July, are not among the canceled checks on the July 31 statement, d. In comparing the canceled checks on the bank statement with the entries in the accounting records, it is found that Check No. 3056 for July rent expense was correctly written and drawn for $1,270 but was erroneously entered in the accounting records as $1,250, e. The July bank statement shows the bank collected $8,000 cash on a noninterest-bearing note for Branch, deducted a $45 collection expense, and credited the remainder to its account. Branch had not recorded this event before receiving the statement . The bank statement shows an $805 charge for a $795 NSF check plus a $10 NSF charge. The check had been received from a customer, Evan Shaw. Branch has not yet recorded this check 8. The July statement shows a $25 bank service charge. It has not yet been recorded in miscellaneous expenses because no previous notification had been received. h. Branch's July 31 daily cash receitts of $11,514 were placed in the bank's night depository on that date but do not appear on the July 31 bank statement Required: as NSF Part 3a. Prepare the bank reconciliation for Branch company as of July 31, 2017 Required: Be sure to show all work for your calculations. Use the Bank Reconciliation Excel template provided to complete your assignment. ACCT110 - Cash Control Operations 33 Focus ACCT110 - Cash Control Operations 3 Part 3b. Prepare the journal entries necessary to bring the company's book balance of cash into conformity with the reconciled cash balance as of July 31, 2017 Required: Be sure to include a description for each journal entry Question #4: Petty Cash Background: Palmana Co establishes a $170 petty cash fund on January 1. On January 8, the fund shows $59 in cash along with receipts for the following expenditures: Expenditures: Postage, $46; Office Supplies, $14, delivery expenses, $16; and miscellaneous expenses, $35. Required: Part 1. Prepare journal entry to establish the petty cash fund on January 1 Part 2. Prepare the journal entry to reimburse the petty cash fund on January 8 Part 3. Prepare the journal entry to reimburse the petty cash fund and increase it to $220 on January 8, assuming no entry in part 2. (Hint: Make two separate entries for part 3 -- one to reimburse and one to increase.) Required: Be sure to include a description for each journal entry Focus
