R7 Internal Control and Cash w Internal control suggest E7.2 (LO 1, 2) C The following control procedures are used in Sheridan Company for cash receipts. 1. To minimize the risk of robbery, cash in excess of $200 is stored in a locked metal box in the office manager's office until it is deposited in the bank. All employees know where the office manager keeps the key to the box. 2. The company has one cash register with a single cash drawer. Any one of three employees may operate the cash register. 3. All employees handling cash receipts are experienced and therefore are not bonded. 4. In order to increase efficiency, the assistant controller opens all of the mail, prepares the bank deposit, and prepares the journal entries to record the cash receipts. 5. Due to a lack of storage space, all remittance advices and debit or credit card sales receipts are destroyed each weekend. Instructions a. For each procedure, explain the weaknesses in internal control, and identify the control activity that is violated. b. For each weakness, suggest a change in procedure that will result in good internal control. 8.14 (LO 4) AN The following information (in millions) was taken from the December 31 financial statements of Canadian National Railway Company 2017 2016 2015 Accounts receivable, gross $ 1,000 $ 903 $ 885 Allowance for doubtful accounts 16 28 Accounts receivable, net 984 875 878 Revenues 13,041 12,037 12,611 Total current assets 2,190 2,107 Total current liabilities 3,983 3,008 2,998 2,153 Instructions a. Calculate the 2017 and 2016 current ratios. b. Calculate the receivables turnover and average collection period for 2017 and 2016. c. Comment on any improvement or weakening in CN's liquidity and its management of accounts receivable