onciliation P5.5 The bookkeeper who has worked for a small hotel for more than 30 years is retiring. Because he was such a reliable employee, he was given more and more responsibility over the years and did virtually all of the work, such as keeping all the accounting records, approving invoices for pay- ment, preparing checks, and, in the absence of the hotel's owner, signing checks that needed to be sent to suppliers. His daily duties included col- lecting the cash at the end of the day from the front office and restaurant, clearing the machine tapes, counting and verifying cash against tapes, de- positing the cash in the bank, and making the necessary entries in the ho- tel's bookkeeping records. At month-end he would do the bank reconcil- iation. The hotel's owner realizes that she cannot hire and train someone to take over all the responsibilities of the retiring bookkeeper and that it would not be desirable for internal control purposes to do so. She knows that she will have to assume some of the retiring employee's duties. She is busy already, since, as well as generally managing the hotel she does all the ordering of food supplies for the restaurant and all the ordering and receiving of bar supplies. From an internal control point of view, discuss which of the retiring bookkeeper's responsibilities the owner should take over while, at the same time, minimizing the amount of time this would require. P5.6 The owner of Charlene's Restaurant believes that her food cost is higher than it should be. Charlene thinks that the problem might be in the re- ceiving area and/or the dining area because she says she has good con- trol over food in storage and production. She has asked you to see what you can determine. By observation, you notice that when drivers make deliveries, they obtain a signature from any restaurant employee who hap- pens to be near the receiving dock in the absence of the receiver or store- keeper. Deliveries are then left at the receiving dock until the goods re- ceived can be moved to a storage area. Sometimes invoices are left with food containers; at other times, no documentation is left. It is assumed that suppliers will mail the missing invoices to Charlene's office. In the dining area you notice that the servers do not use printed sales checks to record customers' orders but simply note orders on scratch pads. They then tell the cooks what they need, and they pick up and deliver food to the customers. When the customers wish to pay, the servers jot down the total amount due on the scratch pad page, present the page to the customer, collect the cash, and put it into a cash drawer. No sales rev- enue was recorded in the cash register. Used" scratch pad pages are placed in a box beside the cash drawer. In both receiving and dining areas, outline the possible problems that current procedures create and suggest to Charlene practices that would probably solve the problems
