sented for SEs a university b. bank e. government unit (city or state) d. manufacturing company e, expansion of S&S to a chain of two stores troller of SDC, an automotive parts manufacturir 2.2. llie Mace is the cont jor operating divisions are heat tr chinins Last vears s from each division ranged from $150.000 Each division is physically and managerially independent, except f veillance of Sam Dilley, the firm's founder g divisions are heat treating. extruding, small parts s0 the constant s The AlS for each division evolved according to the needs and ahi counting staff. Mace is the first controller to have responsibility for ow management. Dilley wants Mace to improve the AIS before he retires so that it will be easier to monitor division performance. Mace decides t ew financial reporting system to include the following features . It should give managers uniform, timely, and accurate reports of busine f 1ts ss day of the following month to provide enough time to take corrective athe the next month's performance. Company-wide financial reports should Monthly reports should be uniform across divisions and be completed h acty to able at the same time Reports should provide a basis for measuring the return on investm should show ould ion. Thus, in addition to revenue and expense accounts, reports she s assigned to each division. The system, should generate meaningful budget data for planning and deci si ing purposes. Budgets should reflect managerial responsibility and show cost major product groups Mace believes that a new chart of accounts is required to accomplish these go He wants to divide asset accounts into six major categories, such as current assets and ssets and plant and equipment. He does not foresee a need for more than 10 control accoun within each of these categories. From his observations to date. 100 subsidiary accoun are more than adequate for each control account No division has more than five major product groups. Mace foresees a maximum t centers within any product group, including both the operating and nonop erating groups. He views general divisional costs as a non-revenue-producing prod uct group. Mace estimates that 44 expense accounts plus 12 specific variance accouns would be adequate REQUIRED Design a chart of accounts for SDC. Explain how you structured the chart of accoun to meet the company's needs and operating characteristics. Keep total account cw ength to a minimum, while still satistfying all of Mace's desires. (CMA Examinu adapted) 3. An audit trail enables a person to trace a source document to its ultimate efec financial statements or work back from financial statement amounts to sou ments. Describe in detail the audit trail for the following a. Purchases of inventory b. Sales of inventory c. Employee payroll rce d