The Separation of Duties/Responsibilities is a major component of Internal Control Activities. However, beyond Separation of Duties/Responsibilities, there are other specific control procedures and policies with respect to revenue, receipts and cash receipts. Consider Foot Fault in respect of its operations of selling tennis equipment from inventory to its customers. Foot Fault's organizational structure includes the following departments: Sales dept. Customer Order Processing dept. Credit Check dept. Inventory Management dept. Shipping dept. Accounting (record keeping) dept. Customer Billings dept. Cash Management/Treasury dept. Required: Propose 5 (five) specific Control policies in a control structure governing revenue recognition and cash accounting for Foot Fault, and include the following for each proposed policy: 1) A description of each policy i.e. what function or task proposed for the department(s) 2) The department(s) of the company to which the policy applies (departments as provided above) 3) The reason for the policy you propose; logical and reasonable support is expected linking the policy to the objective(s). Group Assignment 2 (GA2) for ACCT 742, Fall 2020: Group 7 Stephen Hudovernik - The Business School, Centennial College GA2_ACCT742 Fall 2020: Group 7 4 of 5 [Part 2]: 25 marks Foot Fault maintains an Accounts Receivable control account and a subsidiary Receivables sub-ledger with customer-bycustomer details. Foot Fault also maintains an Allowance for Doubtful Accounts. Michele Teper is reviewing management's draft Statement of Financial Position, which lists the net value of the Accounts Receivable as at October 31, 2020, as follows: Accounts Receivable $125,000 Allowance for Doubtful Accounts 5,000 Net $120,000 All of Foot Fault's customers are extended terms of n/30, which means any receivable is due within 30 days from the invoice date. Foot Fault estimates the collectability of receivables aged more than 30 days to be as follows: 30-60 days of age: 2% will be uncollectible 61-90 days of age: 10% will be uncollectible Over 90 days of age: 50% will be uncollectible Michele wants to test the valuation assertion of Accounts Receivable. She decides to create an Aged Accounts Receivable Trial Balance similar to that found on page 477 of the course textbook. Michele considers materiality for her inquiry to be $5,000. Relevant sub-ledger customer information will be sent to each Group via email by the Professor. Your Group's subledger customer data is contained in a separate file. Required: (a) Produce an Aged Accounts Receivable Trial Balance for Foot Fault. (b) State an opinion on whether Foot Fault's Receivables are materially misstated. You must explain why you come to your conclusion using your analysis in part (a). Group Assignment 2 (GA2) for ACCT 742, Fall 2020: Group 7 Stephen Hudovernik - The Business School, Centennial College GA2_ACCT742 Fall 2020: Group 7 5 of 5 [Part 3]: 10 marks As mentioned in the introduction, Foot Fault manufacturers some of its product offering: tennis equipment such as rackets and tennis balls, tennis clothing such as shirts and shorts, and accessories. In order to manufacture these items, Foot Fault purchases supplies from external third parties. Liabilities to these third parties for goods and services purchased are entered in an Accounts Payable Journal, at which time the debits are classified as assets (the credit is to the liability Accounts Payable). Foot Fault maintains some specific control procedures regarding: the approval payments or supplier invoices cheque signing record-keeping, and reconciliation of cheques to bank statements. Michele Teper, as the audit manager on the Foot Fault engagement, is required to list control procedures that she wants to audit for their effectiveness with respect to cash payments. Required: Suggest to Michele a minimum of 2 (two) control tests for each of the below Control Objectives in an audit plan, with the goal of measuring the effectiveness of each Control Objective as indicated below in the table. Logical and reasonable support is expected linking the policy to the objective(s). These control tests must be described (i.e. do more than provide a "name" of a test; ensure you describe the test with sufficient detail to link it to the Control Objective). Table Validity Objective Recorded payments are valid and documented, and represent payment for goods and services received Accuracy Objective Cash payment dollar amounts are calculated and recorded accurately Classification Objective Cash payments are properly classified in the accounts