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Mobile Security, Inc. Mobile Security, Inc. ( MSI ) has been an audit client of Leo & Lee, LLP for the past 1 2 years.
Mobile Security, Inc. Mobile Security, Inc. MSI has been an audit client of Leo & Lee, LLP for the past years. MSI is a small, publicly traded aviation company based in Cleveland, Ohio, where it manufactures hightech unmanned aerial vehicles UAV also known as drones, and other surveillance and security equipment. MSI's products are primarily used by the military and scientific research institutions, but there is growing demand for UAVs for commercial and recreational use. MSI must go through an extensive bidding process for large government contracts. Because of the sensitive nature of government contracts and military product designs, both the facilities and records of MSI must be highly secured. In October MSI installed a new cloudbased inventory costing system to replace a system that had been developed inhouse. The old system could no longer keep up with the complex and detailed manufacturing costing process that provides information to support competitive bidding. MSI's IT department, together with consultants from the software company, implemented the new inventory costing system, which went live on December Key operational staff and the internal audit team from MSI were significantly engaged in the selection, testing, training, and implementation stages. The inventory costing system uses various manufacturing costing and unit of production inputs to calculate and produce a database of all product costs and recommended sales prices. It also integrates with the general ledger each time there are product inventory movements such as purchases, sales, waste, and damaged inventory losses. The following list of sales invoices are entered in the sales journal for the months of June and July respectively. All goods are shipped FOB shipping point. June July Analysis and evaluation: Analyze the eight transactions shown above. Based on a sales cutoff analysis, record necessary adjusting journal entries at June in connection with the foregoing data. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select No entry" for the account titles and enter for the amounts. Date Account Titles and Explanation Debit Credit June To record the revenues June To record the cost of goods sold eTextbook and Media List of Accounts
Mobile Security, Inc.
Mobile Security, Inc. MSI has been an audit client of Leo & Lee, LLP for the past years. MSI is a small, publicly
traded aviation company based in Cleveland, Ohio, where it manufactures hightech unmanned aerial vehicles
UAV also known as drones, and other surveillance and security equipment. MSI's products are primarily used
by the military and scientific research institutions, but there is growing demand for UAVs for commercial and
recreational use. MSI must go through an extensive bidding process for large government contracts. Because of
the sensitive nature of government contracts and military product designs, both the facilities and records of MSI
must be highly secured.
In October MSI installed a new cloudbased inventory costing system to replace a system that had been
developed inhouse. The old system could no longer keep up with the complex and detailed manufacturing
costing process that provides information to support competitive bidding. MSI's IT department, together with
consultants from the software company, implemented the new inventory costing system, which went live on
December Key operational staff and the internal audit team from MSI were significantly engaged in the
selection, testing, training, and implementation stages.
The inventory costing system uses various manufacturing costing and unit of production inputs to calculate and
produce a database of all product costs and recommended sales prices. It also integrates with the general ledger
each time there are product inventory movements such as purchases, sales, waste, and damaged inventory
losses.
The following list of sales invoices are entered in the sales journal for the months of June and July
respectively. All goods are shipped FOB shipping point.
June
July
Analysis and evaluation: Analyze the eight transactions shown above. Based on a sales cutoff analysis, record
necessary adjusting journal entries at June in connection with the foregoing data. Credit account titles are
automatically indented when amount is entered. Do not indent manually. If no entry is required, select No
entry" for the account titles and enter for the amounts.
Date Account Titles and Explanation
Debit
Credit
June
To record the revenues
June
To record the cost of goods sold
eTextbook and Media
List of Accounts
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