E4-16A (book/static) Question Help The following situations describe two cash payment situations and two cash recaipt situations. In each pair, one set of intemal controls is better than the other. 0 (Click the icon to view the situations.) Requirement 1. Evaluate the intemal controls in each situation as strong or weak, and give the reason for your answer. Cash receipts a. Samson Auto Parts has weak internal controls. There is not a good sepa Situations Cash receipts a. At Samson Carpet Mill, cash received by mail goes straight to the bookkeeper, who debits Cash and credits Accounts Receivable to record the collections from customers. The bookkeeper then deposits the cash in the bank. Cash received by mail at Liberty Dermatology Clinic goes to the mailroom, where a mail clerk opens envelopes and totals the cash receipts for the day. The mail clerk forwards customer checks to the cashier for deposit in the bank and forwards the remittance advices to the accounting department for posting credits to customer accounts b. Cash payments: a. Scott Construction policy calls for construction supervisors to request the equipment needed for their jobs. The home office then purchases the equipment and has it shipped to the construction site. b. Remington Home Construction's policy calls for project supervisors to purchase the equipment needed for jobs. The supervisors then submit the paid receipts to the home office for reimbursement. This policy enables supervisors to get the equipment quickly and keep construction jobs moving Click to select your answers) and then click Check Answer. Print Done parts remaining Each of the following situations reveals an internal control weakness Requirements 1. Identify the missing intemal control characteristic in each situation. 2. Identify each organization's possible problem 3. Propose a solution to the problem. (Click on the icon to view the situations.) Situation a. Jake Bates has been an employee of the city of Elmhurst for many years. Because the city is sSituations and bank reconclllations. nk deposits Requirement 1. Missing Control Characteristic: Requirement 2. Possible Problem: Requirement 3. Potential Solution: Jake Bates has been an employee of the city of Elmhurst for many years. Because the city is small, Bates performs all of its accounting duties, in addition to opening the mail and preparing bank deposits and bank reconciliations. a. b. A purchasing agent for Mark Manufacturing is responsible for buying diamonds for use in the company's manufacturing process, approving the invoices for payment, and signing the checks. No supervisor reviews the purchasing agent's work. Bailey Price owns an architectural firm. Price's staff consists of 16 professional architects, and Price manages the office. Often her work requires her to travel to meet with clients. During the past six months, Price has observed that when she returns from a business trip, the architecture jobs in the office have not progressed satisfactorly. She learns that when she is away, two of her senior architects take over office management and neglect their normal duties. One employee could manage the office c. Click to select vour answerls) and then click Check Answer Mark Kershey, a former Smucker employee, was charged with defrauding the J.M. Smucker Company of more than $4.1 million over a 16-year period. Charges were filed in October 2014. In 2015, Kershey was sentenced to nearly five years in prison. (Click the icon to view additional Information.) Read the requirements. Requirement 1. What internal controls could have been used to prevent Kershey from carrying out the false billing s There should have been might possibly More Info Kershey was the chief airplane mechanic at the company's hangar at the Akron-Canton Airport in Ohio from 1990 until he was discharged by Smucker in 2013. From 1997 until the time he left Smucker, Kershey invoiced Smucker for more than $4.1 million by using a fictitious entity he created. He billed Smucker for nonexistent parts and/or work that he himself actually performed as part of his duties as a salaried employee. Most of these invoices were for less than $10,000 which Kershey himself was authorized to approve. A supervisor to Kershey approved the few invoices that were for more than $10,000 based on his trust in Kershey. To carry out his false billing scheme, Kershey set up a post office box in Lake Township, Ohio, using the fictitious entity name of Aircraft Parts Services Co (APS). He (as APS) would then invoice Smucker using nonsequentlal involce numbers, so it looked like APS was invoicing other companies too. Kershey used the proceeds to purchase and maintain two planes and several automobiles, and to make payments on his house. Kershey was eventually caught in late 2012 when three checks written by Smucker to APS totaling $44,000 were not cashed. When a Smucker employee questioned Kershey about the uncashed checks, Kershey indicated that APS had been sold to another Smucker vendor. The false billing scheme began to unravel and Kershey was fired. V.Kershey should not have The Requirements 1. What internal controls could have been used to prevent Kershey from carrying out the false billing scheme? 2. What factors might have contributed to the weak internal control environment that allowed this scheme to exist for 16 years? Print Done Homework: Week 5: Homework Score: 0 of 7 pts E5-16A (similar to) Save 4 of 6 (0 complete) Hw Score: 0%, 0 of 45 pts Question Help Color Interiors reported the following transactions in March: (Click on the icon to view the transactions.) Read the requirements. Requirement 1. Record the foregoing transactions in the journal of Color Interiors using the gross method. (You do not need to make the cost of sales journal entries; assume that these entries will be made by the company when it makes its other adjusting entries at period end.) (Record debits first, then credits. Exclude explanations from any journal entries.) Mar 2: Sold merchandise on account to Tyson Elsworth, $600, terms 1/10, n/30 Journal Entry i More Info Date Accounts Debit Credit Mar 2 Mar 2 Sold merchandise on account to Tyson Elsworth. S600, terms 1/10, n/30 10 Sold merchandise on account to Bruce Oxford. S2,400, terms 1,10' n/30. 11 Collected payrment from Elsworth for the March 2 sale 15 Oxford returned $1,200 of the merchandise purchased on March 10. 19 Collected payment from Oxford for the balance of the March 10 sale Requirements Print Done 1. Record the foregoing transactions in the journal of Color Interiors using the gross method. (You do not need to make the cost of sales joumal entries; assume that these entries will be made by the company when it makes its other adjusting entries at period end.) Calculate the amount of gross sales minus sales discounts for the month of March. Choose from any list or enter any n parts remaining 2. Check Answer Score: 0 of 7 pts 5 of 6 (0 complete) HW Score: 0%, 0 of 45 pts E5-19A (similar to) Question Help On November 30, Special Party Planners had a $38,000 balance in Accounts Receivable and a $3,134 credit balance in Allowance for Uncollectible Accounts. During December, Special made credit sales of $192,000. December collections on account were $170,000 and write-offs of uncollectible receivables totaled S2 880 Uncollectible accounts expense is estimated as 4% of credit sales. No sales retums are expected. lgnore cost of goods sold Read the requirements. Requirement 1. Journalize sales, collections, write-offs of uncollectibles, and uncollectible-account expense by the allowance method during December. Explanations are not required. (Record debits first, then credits. Exclude explanations from any joumal entries.) (a) Begin by recording the joumal entry for December sales Requirements Journal Entry Date Accounts Debit Credit 1. Journalize sales, collections, write-offs of uncollectibles, and uncollectible-account expense by the allowance method during December Explanations are not required Show the ending balances in Accounts Receivable, Allowance for Uncollectible Accounts, and Nef Accounts Receivable at December 31. How much does Special expect to collect? Show how Special Party Planners will report accounts receivable and net sales on Its December 31 balance sheet and Income statement for the month ended December 31 2. 3. PrintDone Choose from any list or enter any number in the input fields and then click Check Answer. Homework: Week 5: Homework Score: 0 of 10 pts P5-58A (similar to) Save 6 of 6 (0 complete) HW Score: 0%, 0 of 45 pts Requirements The September 30, 2019, records of Up To Date Communications include these accounts: EEB (Click the icon to view the September 30, 2019 account balances.) During the last quarter of 2019, the company completed the following selected transactions: During the year, Up T sales. At year-end (D Allowance for Uncol 1. (Click the icon to 31, 2019.) Read the requiremen Record the transactions for the last quarter of 2019 in the journal. Explanations are not required Prepare a T-account for Allowance for Uncollectible Accounts with the appropriate beginning balance. Post the entries from requirement 1 to that account. (Click the icon to view the selected transactions.) 2. 3. Show how Up To Date Communications will report its accounts receivable in ations are not required. (Record debits a comparative balance sheet for 2018 and 2019. (Use the three-line reportinn format.) At December 31, 2018, the company's Accounts Reeiable balanc was $213,000, and the Allowance for Uncollectible Accounts stood at $4,700 (Be sure to use the December 31, 2019 aging schedule given in the problem data.) Data Table account receivable from Rare Antiques. At September 30, 2019: Credit More l . $242,000 PrintDone Allowance for Uncollectible Accounts (8,500) Accounts Receivable and aging schedule to be used at December 31, 2019 More Info Age of Accounts Accounts Receivable $230,000 Estimated percent uncollectible 1-30 Days 31-60 Days 61-90 Days Over 90 Days 20,000 35% Nov 30 S 138,000 S54,000 18,000 $ Wrote off as uncollectible the $1,700 account receivable from Blue Carpets and the $800 account receivable from Rare Antiques. Adjusted the Allowance for Uncollectible Accounts and recorded uncollectible-account expense at year-end, based on the aging of receivables 0.2% 2% 15% Dec 31 Print Done E4-16A (book/static) Question Help The following situations describe two cash payment situations and two cash recaipt situations. In each pair, one set of intemal controls is better than the other. 0 (Click the icon to view the situations.) Requirement 1. Evaluate the intemal controls in each situation as strong or weak, and give the reason for your answer. Cash receipts a. Samson Auto Parts has weak internal controls. There is not a good sepa Situations Cash receipts a. At Samson Carpet Mill, cash received by mail goes straight to the bookkeeper, who debits Cash and credits Accounts Receivable to record the collections from customers. The bookkeeper then deposits the cash in the bank. Cash received by mail at Liberty Dermatology Clinic goes to the mailroom, where a mail clerk opens envelopes and totals the cash receipts for the day. The mail clerk forwards customer checks to the cashier for deposit in the bank and forwards the remittance advices to the accounting department for posting credits to customer accounts b. Cash payments: a. Scott Construction policy calls for construction supervisors to request the equipment needed for their jobs. The home office then purchases the equipment and has it shipped to the construction site. b. Remington Home Construction's policy calls for project supervisors to purchase the equipment needed for jobs. The supervisors then submit the paid receipts to the home office for reimbursement. This policy enables supervisors to get the equipment quickly and keep construction jobs moving Click to select your answers) and then click Check Answer. Print Done parts remaining Each of the following situations reveals an internal control weakness Requirements 1. Identify the missing intemal control characteristic in each situation. 2. Identify each organization's possible problem 3. Propose a solution to the problem. (Click on the icon to view the situations.) Situation a. Jake Bates has been an employee of the city of Elmhurst for many years. Because the city is sSituations and bank reconclllations. nk deposits Requirement 1. Missing Control Characteristic: Requirement 2. Possible Problem: Requirement 3. Potential Solution: Jake Bates has been an employee of the city of Elmhurst for many years. Because the city is small, Bates performs all of its accounting duties, in addition to opening the mail and preparing bank deposits and bank reconciliations. a. b. A purchasing agent for Mark Manufacturing is responsible for buying diamonds for use in the company's manufacturing process, approving the invoices for payment, and signing the checks. No supervisor reviews the purchasing agent's work. Bailey Price owns an architectural firm. Price's staff consists of 16 professional architects, and Price manages the office. Often her work requires her to travel to meet with clients. During the past six months, Price has observed that when she returns from a business trip, the architecture jobs in the office have not progressed satisfactorly. She learns that when she is away, two of her senior architects take over office management and neglect their normal duties. One employee could manage the office c. Click to select vour answerls) and then click Check Answer Mark Kershey, a former Smucker employee, was charged with defrauding the J.M. Smucker Company of more than $4.1 million over a 16-year period. Charges were filed in October 2014. In 2015, Kershey was sentenced to nearly five years in prison. (Click the icon to view additional Information.) Read the requirements. Requirement 1. What internal controls could have been used to prevent Kershey from carrying out the false billing s There should have been might possibly More Info Kershey was the chief airplane mechanic at the company's hangar at the Akron-Canton Airport in Ohio from 1990 until he was discharged by Smucker in 2013. From 1997 until the time he left Smucker, Kershey invoiced Smucker for more than $4.1 million by using a fictitious entity he created. He billed Smucker for nonexistent parts and/or work that he himself actually performed as part of his duties as a salaried employee. Most of these invoices were for less than $10,000 which Kershey himself was authorized to approve. A supervisor to Kershey approved the few invoices that were for more than $10,000 based on his trust in Kershey. To carry out his false billing scheme, Kershey set up a post office box in Lake Township, Ohio, using the fictitious entity name of Aircraft Parts Services Co (APS). He (as APS) would then invoice Smucker using nonsequentlal involce numbers, so it looked like APS was invoicing other companies too. Kershey used the proceeds to purchase and maintain two planes and several automobiles, and to make payments on his house. Kershey was eventually caught in late 2012 when three checks written by Smucker to APS totaling $44,000 were not cashed. When a Smucker employee questioned Kershey about the uncashed checks, Kershey indicated that APS had been sold to another Smucker vendor. The false billing scheme began to unravel and Kershey was fired. V.Kershey should not have The Requirements 1. What internal controls could have been used to prevent Kershey from carrying out the false billing scheme? 2. What factors might have contributed to the weak internal control environment that allowed this scheme to exist for 16 years? Print Done Homework: Week 5: Homework Score: 0 of 7 pts E5-16A (similar to) Save 4 of 6 (0 complete) Hw Score: 0%, 0 of 45 pts Question Help Color Interiors reported the following transactions in March: (Click on the icon to view the transactions.) Read the requirements. Requirement 1. Record the foregoing transactions in the journal of Color Interiors using the gross method. (You do not need to make the cost of sales journal entries; assume that these entries will be made by the company when it makes its other adjusting entries at period end.) (Record debits first, then credits. Exclude explanations from any journal entries.) Mar 2: Sold merchandise on account to Tyson Elsworth, $600, terms 1/10, n/30 Journal Entry i More Info Date Accounts Debit Credit Mar 2 Mar 2 Sold merchandise on account to Tyson Elsworth. S600, terms 1/10, n/30 10 Sold merchandise on account to Bruce Oxford. S2,400, terms 1,10' n/30. 11 Collected payrment from Elsworth for the March 2 sale 15 Oxford returned $1,200 of the merchandise purchased on March 10. 19 Collected payment from Oxford for the balance of the March 10 sale Requirements Print Done 1. Record the foregoing transactions in the journal of Color Interiors using the gross method. (You do not need to make the cost of sales joumal entries; assume that these entries will be made by the company when it makes its other adjusting entries at period end.) Calculate the amount of gross sales minus sales discounts for the month of March. Choose from any list or enter any n parts remaining 2. Check Answer Score: 0 of 7 pts 5 of 6 (0 complete) HW Score: 0%, 0 of 45 pts E5-19A (similar to) Question Help On November 30, Special Party Planners had a $38,000 balance in Accounts Receivable and a $3,134 credit balance in Allowance for Uncollectible Accounts. During December, Special made credit sales of $192,000. December collections on account were $170,000 and write-offs of uncollectible receivables totaled S2 880 Uncollectible accounts expense is estimated as 4% of credit sales. No sales retums are expected. lgnore cost of goods sold Read the requirements. Requirement 1. Journalize sales, collections, write-offs of uncollectibles, and uncollectible-account expense by the allowance method during December. Explanations are not required. (Record debits first, then credits. Exclude explanations from any joumal entries.) (a) Begin by recording the joumal entry for December sales Requirements Journal Entry Date Accounts Debit Credit 1. Journalize sales, collections, write-offs of uncollectibles, and uncollectible-account expense by the allowance method during December Explanations are not required Show the ending balances in Accounts Receivable, Allowance for Uncollectible Accounts, and Nef Accounts Receivable at December 31. How much does Special expect to collect? Show how Special Party Planners will report accounts receivable and net sales on Its December 31 balance sheet and Income statement for the month ended December 31 2. 3. PrintDone Choose from any list or enter any number in the input fields and then click Check Answer. Homework: Week 5: Homework Score: 0 of 10 pts P5-58A (similar to) Save 6 of 6 (0 complete) HW Score: 0%, 0 of 45 pts Requirements The September 30, 2019, records of Up To Date Communications include these accounts: EEB (Click the icon to view the September 30, 2019 account balances.) During the last quarter of 2019, the company completed the following selected transactions: During the year, Up T sales. At year-end (D Allowance for Uncol 1. (Click the icon to 31, 2019.) Read the requiremen Record the transactions for the last quarter of 2019 in the journal. Explanations are not required Prepare a T-account for Allowance for Uncollectible Accounts with the appropriate beginning balance. Post the entries from requirement 1 to that account. (Click the icon to view the selected transactions.) 2. 3. Show how Up To Date Communications will report its accounts receivable in ations are not required. (Record debits a comparative balance sheet for 2018 and 2019. (Use the three-line reportinn format.) At December 31, 2018, the company's Accounts Reeiable balanc was $213,000, and the Allowance for Uncollectible Accounts stood at $4,700 (Be sure to use the December 31, 2019 aging schedule given in the problem data.) Data Table account receivable from Rare Antiques. At September 30, 2019: Credit More l . $242,000 PrintDone Allowance for Uncollectible Accounts (8,500) Accounts Receivable and aging schedule to be used at December 31, 2019 More Info Age of Accounts Accounts Receivable $230,000 Estimated percent uncollectible 1-30 Days 31-60 Days 61-90 Days Over 90 Days 20,000 35% Nov 30 S 138,000 S54,000 18,000 $ Wrote off as uncollectible the $1,700 account receivable from Blue Carpets and the $800 account receivable from Rare Antiques. Adjusted the Allowance for Uncollectible Accounts and recorded uncollectible-account expense at year-end, based on the aging of receivables 0.2% 2% 15% Dec 31 Print Done