DISBURSEMENT CYCLE Purchasing Every Friday afternoon, the salespeople prepare weekly sales reports from their copies of the sales orders. They send the reports to Ed and then refile their sales orders by customer name. Ed reviews the weekly sales reports and the weekly inventory reports prepared by Fred and Ted. Ed "eyeballs\" the numbers, notes any shortages in inventory, and prepares 3-part purchase orders. He mails the original to the vendor, sends one to the twins in the distribution center and one copy to Mary. As noted above, Fred and Ted have a card file for keeping track of inventory. Each card has a running balance to expedite the preparation of the weekly inventory reports for Ed. When they receive a copy of a purchase order, they pull the cards for the item(s] ordered, record the quantity ordered and the PD. number, and file the purchase order in numerical order. When the shipment arrives, Fred and Ted pulls the purchase order to make sure that the items received were the items ordered and note any back orders on the purchase order. Then they pull the inventory cards, mark the items received, and prepare a receiving report that is sent to Mary. Cash Disbursements As noted above, Mary opens the mail and separates and logs the cash receipts and the invoices to be paid. Invoices are filed in alphabetical order by due date. Each Thursday, Mary pulls the invoices that are due that week and types three-part checks. The checks, along with the invoices, are given to Ed for his approval and signature. After Ed signs the checks, Mary mails the original, files the second copy in check number order, and attaches the third copy to the invoice. She then enters the check in the cash disbursement journal and the accounts payable subsidiary ledger. The third copy of the check and the attached invoice are filed alphabetically by vendor name. Paoll A full service payroll processing company called Payroll Paid Promptly (PPP) processes payroll. PPP calculates the payroll, creates and mails the checks to the employees and remits all payroll taxes and other withholdings to the appropriate locations. They send Mary a report once per month reecting the transactions made on behalf of PPP. Mary prepares a journal entry to reect the payroll and updates the general ledger. PPP charges a fee of 10% of the gross payroll for the payroll service. Mary prepares the check for these services once per month. The employees, who are paid once a month, are as follows: Lauren Allen, a salesperson at the showroom Paul Barton and Ernest Callahan, traveling salesmen Fred and Ted Hill, twins who work at the distribution center