TRIPLE PLAY,ING Triple Play, Inc. was established in 1982 by Randy Cleaver, Jim "Blucfish" Johnson, and Willie Lloyd, all ex-major league baseball players who were interested in offering quality baseball mitts at affordable prices. These players felt that, at the time, baseball glove manufacturers did not have a good sense of what the player needed in a baseball glove. They felt that they could gain a large portion of the market share by using their marketable names and having confidence in producing quality products. During their years as professional baseball players, these men established a large network of acquaintances through many avenues. They had good reputations with their coaches and management, minor league farm systems, and also little league baseball players as a result of the various baseball clinics they ran during their careers. Operations commenced in 1982 in Williamsport, Pennsylvania under complete supervision of Johnson, yet all three were close friends and agreed upon becoming business partners directly after retirement. They all had solid business backgrounds and considered success in business more challenging than success in baseball. During the first three years, Cleaver and Lloyd were still playing and agreed in written contract form to be sponsors for the gloves that were manufactured, allowing Johnson to market their names along with his on the palm of each glove. During this time, Johnson was busy solidifying the business and establishing working business relationships within the strong network he established as a player In 1985, Cleaver retired and joined Johnson in the operations. They continued using Lloyd's name on the gloves until he retired in 1990. Cleaver and Johnson together set up contracts for I1 suppliers and were steadily improving the financial status of the company, increasing revenues from S600,000 on about 12,000 glove sales in 1982 to over S5 million in revenues on around 83,000 glove sales in 1985. Yet they were experiencing problems with their quality that they hadn't expected. Some of the suppliers were simply not producing the top-notch rawhide that they needed to use in their production process. After much discussion, Lloyd remembered something from his schooling at Harvard that gave them the much-needed insight to solve their problems. "Having 11 suppliers doesn't give you the opportunity to establish large contracts with suppliers that are essential to their business," Lloyd said. "Smaller contracts aren't necessary to their survival. Instead, we should be focused on having large contracts with a smaller amount of suppliers. We will recognize the better and, in return, they will reward the large contract they have by making sure that quality is their number one priority." Lloyd was right. They reduced their suppliers to only 5 in 1989 and have kept the same number since then. They currently receive their rawhide shipments from Joe's Leather, Jim's Leather, and Bob's Leather, all privately owned rawhide manufacturers in Pennsylvania, as well as from Chang Tao Meng's Leather and (Raw) Hide and Dry, manufacturers of rawhide in China and Canada, supplier and deal with them respectively. The shipments sent by (Raw) Hide and Dry are sent by train, while those sent from Chang Tao Meng's Leather are sent by boat. Although transportation costs are significantly higher via boat, laborers are paid $2.50 an hour in China, less than half the ale paid to U.S. laborens, and Chang Tao Meng's is able to charge lower prices for their rawhide. (Raw) Hide and Dry has an imemense supply of rawhide as Canada has the largest population of cows per square mile in the world ln 1990, Lloyd joined the force full-time and provided his expertise at a time when it was much needed. Triple Play, Inc. was at a crossroads in its life as a baseball glove manufacturer in 1991. Basehall was becoming more popular with youngsters and companics like Rawlings and Wilson were taking advantage of this increased popularity. They not only offiered multiple sizes of bascball gloves, but they also produced softball gloves and bascball apparel. At the time, Triple Play offered caly four types of gloves- infielder, outficlder, pitcher, condacted customers. They and catcher. Lloyd and the marketing team investigative research into the wants of their existing and found out that every player has specific needs for their own style of glove and that many people want gloves that fit their hands tightly or loosely. Up until then, Triple Play manufactured only one size for each type of glove, not realizing the need to manufacture different sizes of gloves. With Lloyd's help, Cleaver, Johnson, and others began manufacturing two variations of each of the four types of gloves manufactured previously. They also began making softball gloves and now, in 1999, have three variations of softball gloves as well. With these revamped products, Triple Play's market share has increased from a miniscule 2.5 percent in 1991 to almost 23 percent in 1999. year were about 260,000 gloves a year, consisting of about 45,000 sales of softball gloves and 215,000 sales of baseball gloves. Their total revenues topped $20 million and their market capitalization is about $50 million. Triple Play has 201 employees working for them in their plant in Williamsport, Pennsylvania and they sell y to retailers. Currently, sales are received through the telephone and mail, yet they are seriously coesidering purchasing from their suppliers and selling to their retailers through an automated system that has been available for a couple of years. Demand rose sharply over the last resulting from the famed home run chase by Mark McGwire and Sammy Sosa. As a result, Triple Play is having difficulty keeping up their retailers. The average lead time ranges from 14 days for infielder gloves to 30 days for softball gloves, yet retailers are demanding that they shorten their lead times to 12 and 26, respectively, in order to keep up with demand. Demand estimation needs to be extremely precise because the shipments that Triple Play receives from Chang Tao Meng's Leather in China take over five days to reach the production facilit Williamsport. If Triple Play misses demand requests, the lead time is for each glove. They need to tell their suppliers ahead of time what quantity of rawhide they need, as requested by their retailerns. year due to the skyrocketing increase in popularity with customer orders received from extended five days REVENUE CYCLE Sales Order Processing System The custoener sales order is received via phone or through the mail. Gus Grinwich, the sales clerk, receives the sales order and checks the customer's credit record. Once Grinwich checks the customer's credit record, he prepares the sales order. From this sales order, Grinwich prepares a customer copy, stock release, shipping notice, two copies of the invoice, ledger copy. packing slip, and the file copy. One of the invoice copies, the ledger copy, and the file copy go to the billing department. The other copy of the invoice and the shipping notice are sent to the shipping department. The stock release and the file copy are sent to the warehouse department. In the warchouse department, Steve Rossini, the warchouse clerk, receives the stock release and Phil Denuto, the stocker, checks the shelves to pick the gloves for the sales order. Once the goods are taken off the shelf in the warehouse, the stock release is sent to the billing department. Sparky Littleton, the billing clerk, reconciles the invoice, ledger copy, and stock release to make sure that the amount of inventory taken from the shelves is the same as the amount listed in the invoice. Littleton bills the customer for the goods released from the warchouse department. Littleton prepares the sales journal and makes the journal voucher. The journal voucher is sent to the general ledger department. The stock release is sent to the inventory control. The invoice is then filed in the billing department's file and the ledger copy is sent to the general ledger department. The shipping department receives the invoice and the shipping notice. They send the goods to the carrier along with the invoice, the packing slip, and the two copies of the bill of lading. The invoice states the amount and quantity of goods that the customer requested in the sales order form. The shipping department files the shipping notice from the customer's order Inventory control receives the stock release form from the billing department. With the stock release form, Bobby Higgins, the inventory clerk, updates the inventory subsidiary ledger relating to the goods that have been released from the warehouse. The ledger copy ledger. Periodically, Fielder prepares the accounts receivable summary and reconciles it ledger. These three forms are then filed by Fielder The Cash Receipts System with their payment. This allows Craig Nelson, the mail room clerk, to collect the receipts in the cash receipts journal. Nelson prepares the deposit slips for the funds to be arrives at the general ledger department from the billing department. Dave Fielder, the general ledger clerk, uses the ledger copy to update the accounts receivable subsidiary with the journal voucher from the inventory subsidiary ledger and the journal voucher produced by the sales journal in the billing department in order to update the general The cash receipts system starts when the wholesalers send back the remittance advice payment from the customer and process the cash receipt. Nelson then records the cash deposited into the bank along with the checks. The remittance advice is sent to the general ledger department to update the accounts receivable records and is then filed in the billing department. Finally, Nelson prepares the cash receipt journal, out of which comes a joumal voucher that is sent to the general ledger department Luis Gonzalez, the general ledger clerk, prepares the account summary and journal voucher, which is used to update the general ledger. The account summary and journal voucher is put into the files for reoord. Gonzalez uses the remittance advice copy sent from the mail room, the deposit slip copy from the bank, and the journal voucher from the account summary to reconcile the deposit slips. He then reconciles the deposit slips from the bank with the totals from the accounts receivable and mail room. EXPENDITURE CYCLE Purchase System Inventory control department receives a list of items in inventory and total amounts in each category. The inventory control hand for all gloves (softball, infielder, outfielder, catcher, and pitcher). The quantity-on- hand of each inventory is calculated by the inventory control system, called PICS (Physical Inventory Control Scanner). PICS is an automated computer system used to clerk, Keith Fernando, is given the quantity-on- determine the quantity-on-hand of inventories at specific times. It scans in the inventory when received in the receiving department and scans it out upon shipment in order to update the quantity-on-hand. As each inventory item is updated, Femando chocks to see if the quantity-on-hand drops to the predetermined reorder point. If this is the case Fernando prepares a purchase requisition (PR). Two copies of the purchase requisition are made. One is sent to purchasing to be used to prepare a purchase order (PO) at a later date. Inventory control department keeps the other copy and waits for a copy of the purchase order from purchasing in order to reconcile the amounts on the PR with the amounts on the PO Inventory control department receives a copy of the purchase order from purchasing and compares it to the second copy of the purchase requisition. These two forms are kept in an open purchase requisition file that is filed by purchase requisition number and kept in an open account until notification that the items have been received by the receiving department via the receiving report (RR). The RR is then compared with the PO and PR to make sure that the items received are identical to the items ordered. These three forms are posted to the inventory ledger and a summary report is generated and sent to the general ledger department. The receiving report, purchase order, and purchase requisition are then kept in a closed purchase requisition file by purchase requisition number Purchasing department receives the purchase requisition from inventory control, sorts the purchase requisitions, and prepares a multi-part purchase order. The purchasing manager, Jack Tucker, chooses the supplier based on the five-supplier list given by management. One copy of the PO is sent to inventory control department, where Fernando keeps it in the open purchase requisition file. One copy is sent to the accounts payable (AP) department to be filed in the accounts payable pending file. Another copy is sent to the receiving department to be filed until the inventories arrive. One copy is mailed to the supplier. The last copy is kept in purchasing and is filod along with the purchase requisition received by inventory control in the open purchase order file, awaiting the receiving report sent by the receiving department to confirm that inventories have been received. Purchasing department is sent an invoice by the supplier through the mail that charges Triple Play the dollar amount for the inventories requested. This is kept in the open purchase onder file until the receiving report is received. When the receiving report is received, the purchase order, purchase requisition, and supplier's invoice are taken out of the open purchase order file and the amounts are then compared with those on the receiving report. All four of these reports are then filed in the closed purchase order file sorted by purchase order number. Purchasing department then sends a message through a computer terminal to the accounts payable department that is a copy of the invoice and simply states the quantity and price of the shipment received. The message is received by a computer terminal in the accounts payable department. Only the purchasing keyboard clerk, Lenny Sipowicz, can access the terminal, and only he knows the password needed to enter into the system. The same authority is given to the accounts payable keyboard clerk, Danny Thomson. The message is sent to accounts payable usually two days later, after reconciling the PO, PR, RR, and supplier's invoice. The receiving department receives the goods and reconciles the information on the packing slip attached to the shipment with the information (such as quantity and price) ted on the purchase order which was sent by purchasing department and has been filed temporarily. The receiving clerk, Manuel Barriero, pulls the PO from the file and checks to see that the inventory received is the same as the quantity and price information on PO. After checking that the information is correct, Barriero prepares a receiving report stating that the merchandise was received. One copy of the receiving report accompanies the physical inventories to the warchouse. Another copy is reconciled with the open PO file. A third copy is sent to inventory reconciled with the open PR file. A fourth copy is sent to accounts payable and is filed with the purchase order in the AP pending file. The last copy is filed with the purchase order and packing slip in the receiving department. the sent to purchasing and is control and is Accounts payable department receives a message from purchasing department through the terminal, stating that the invoice has been received. Accounts payable has also received and is temporarily keeping the PO and RR in the AP pending file. When the message about the invoice is received through the terminal, the accounts payable clerk Ivan Pushkin Rodriguez, records the liability and reconciles the information with the PO and RR in the AP pending file. After Pushkin records the liability, he sends the PO, RR and copy of invoice to the open AP file. He also enters the information in the purchases journal and accounts payable subsidiary ledger and then prepares a which is sent to the general ledger department journal voucher, edger department receives a journal voucher from accounts payable ledger summary from inventory control denartment. The general ledger ofne Cratchit, reconciles the journal voucher and ledger summary and posts to the control accounts in the general ledger. The journal voucher and ledger department and a clerk, Ozzie inventory and AP summary are then filed Cash Disbursements System Each day, The cash disbursements process begins with the accounts payable department. the AP clerk, Pushkin searches the open AP file (including the PO, RR, and invoice) to any items that are due and sends these three forms (known as the voucher packet) to cash disbursements department. The voucher packet is received by Wally Mayfield, the cash disbursements clerk. Mayfield reviews the documents for completeness and accuracy and then prepares two copies of the check to be disbursed. Mayfield signs the check and records the information in the cash disbursement journal, which produces a journal vouc sent to the general ledger department One copy of the signed check is sent to supplier, while the other copy is kept in the cash disbursements file. Mayfield then marks the voucher packet as paid and returns it to the accounts payable department. Upon receipt of the voucher packet from cash disbursements department, which states the amount of the check that was disbursed, the accounts payable department the liability by updating the AP subsidiary ledger and keeps the voucher packet in the then removes closed AP file. Finally, the AP clerk, Rodriguez send a ledger summary to the general ledger department The general ledger clerk, Cratchit reconciles the journal voucher and ledger summary and posts to the cash and AP control accounts in the general ledger. The journal voucher and ledger summary are then filed CASE REQUIREMENTS* answer Analyze the current system and prepare a document flowchart of the current system for the revenue and expenditure cycles. Use MS Excel. (30 points) Analyze the current system and identify specific internal control problems. Use MS Word. (30 points) 2. Create Company, record transactions, and print checks and financial statements using MS Office Accounting 2008. (40 points, See next page.) 3. Email with file attachments by the scheduled due date. TRIPLE PLAY,ING Triple Play, Inc. was established in 1982 by Randy Cleaver, Jim "Blucfish" Johnson, and Willie Lloyd, all ex-major league baseball players who were interested in offering quality baseball mitts at affordable prices. These players felt that, at the time, baseball glove manufacturers did not have a good sense of what the player needed in a baseball glove. They felt that they could gain a large portion of the market share by using their marketable names and having confidence in producing quality products. During their years as professional baseball players, these men established a large network of acquaintances through many avenues. They had good reputations with their coaches and management, minor league farm systems, and also little league baseball players as a result of the various baseball clinics they ran during their careers. Operations commenced in 1982 in Williamsport, Pennsylvania under complete supervision of Johnson, yet all three were close friends and agreed upon becoming business partners directly after retirement. They all had solid business backgrounds and considered success in business more challenging than success in baseball. During the first three years, Cleaver and Lloyd were still playing and agreed in written contract form to be sponsors for the gloves that were manufactured, allowing Johnson to market their names along with his on the palm of each glove. During this time, Johnson was busy solidifying the business and establishing working business relationships within the strong network he established as a player In 1985, Cleaver retired and joined Johnson in the operations. They continued using Lloyd's name on the gloves until he retired in 1990. Cleaver and Johnson together set up contracts for I1 suppliers and were steadily improving the financial status of the company, increasing revenues from S600,000 on about 12,000 glove sales in 1982 to over S5 million in revenues on around 83,000 glove sales in 1985. Yet they were experiencing problems with their quality that they hadn't expected. Some of the suppliers were simply not producing the top-notch rawhide that they needed to use in their production process. After much discussion, Lloyd remembered something from his schooling at Harvard that gave them the much-needed insight to solve their problems. "Having 11 suppliers doesn't give you the opportunity to establish large contracts with suppliers that are essential to their business," Lloyd said. "Smaller contracts aren't necessary to their survival. Instead, we should be focused on having large contracts with a smaller amount of suppliers. We will recognize the better and, in return, they will reward the large contract they have by making sure that quality is their number one priority." Lloyd was right. They reduced their suppliers to only 5 in 1989 and have kept the same number since then. They currently receive their rawhide shipments from Joe's Leather, Jim's Leather, and Bob's Leather, all privately owned rawhide manufacturers in Pennsylvania, as well as from Chang Tao Meng's Leather and (Raw) Hide and Dry, manufacturers of rawhide in China and Canada, supplier and deal with them respectively. The shipments sent by (Raw) Hide and Dry are sent by train, while those sent from Chang Tao Meng's Leather are sent by boat. Although transportation costs are significantly higher via boat, laborers are paid $2.50 an hour in China, less than half the ale paid to U.S. laborens, and Chang Tao Meng's is able to charge lower prices for their rawhide. (Raw) Hide and Dry has an imemense supply of rawhide as Canada has the largest population of cows per square mile in the world ln 1990, Lloyd joined the force full-time and provided his expertise at a time when it was much needed. Triple Play, Inc. was at a crossroads in its life as a baseball glove manufacturer in 1991. Basehall was becoming more popular with youngsters and companics like Rawlings and Wilson were taking advantage of this increased popularity. They not only offiered multiple sizes of bascball gloves, but they also produced softball gloves and bascball apparel. At the time, Triple Play offered caly four types of gloves- infielder, outficlder, pitcher, condacted customers. They and catcher. Lloyd and the marketing team investigative research into the wants of their existing and found out that every player has specific needs for their own style of glove and that many people want gloves that fit their hands tightly or loosely. Up until then, Triple Play manufactured only one size for each type of glove, not realizing the need to manufacture different sizes of gloves. With Lloyd's help, Cleaver, Johnson, and others began manufacturing two variations of each of the four types of gloves manufactured previously. They also began making softball gloves and now, in 1999, have three variations of softball gloves as well. With these revamped products, Triple Play's market share has increased from a miniscule 2.5 percent in 1991 to almost 23 percent in 1999. year were about 260,000 gloves a year, consisting of about 45,000 sales of softball gloves and 215,000 sales of baseball gloves. Their total revenues topped $20 million and their market capitalization is about $50 million. Triple Play has 201 employees working for them in their plant in Williamsport, Pennsylvania and they sell y to retailers. Currently, sales are received through the telephone and mail, yet they are seriously coesidering purchasing from their suppliers and selling to their retailers through an automated system that has been available for a couple of years. Demand rose sharply over the last resulting from the famed home run chase by Mark McGwire and Sammy Sosa. As a result, Triple Play is having difficulty keeping up their retailers. The average lead time ranges from 14 days for infielder gloves to 30 days for softball gloves, yet retailers are demanding that they shorten their lead times to 12 and 26, respectively, in order to keep up with demand. Demand estimation needs to be extremely precise because the shipments that Triple Play receives from Chang Tao Meng's Leather in China take over five days to reach the production facilit Williamsport. If Triple Play misses demand requests, the lead time is for each glove. They need to tell their suppliers ahead of time what quantity of rawhide they need, as requested by their retailerns. year due to the skyrocketing increase in popularity with customer orders received from extended five days REVENUE CYCLE Sales Order Processing System The custoener sales order is received via phone or through the mail. Gus Grinwich, the sales clerk, receives the sales order and checks the customer's credit record. Once Grinwich checks the customer's credit record, he prepares the sales order. From this sales order, Grinwich prepares a customer copy, stock release, shipping notice, two copies of the invoice, ledger copy. packing slip, and the file copy. One of the invoice copies, the ledger copy, and the file copy go to the billing department. The other copy of the invoice and the shipping notice are sent to the shipping department. The stock release and the file copy are sent to the warehouse department. In the warchouse department, Steve Rossini, the warchouse clerk, receives the stock release and Phil Denuto, the stocker, checks the shelves to pick the gloves for the sales order. Once the goods are taken off the shelf in the warehouse, the stock release is sent to the billing department. Sparky Littleton, the billing clerk, reconciles the invoice, ledger copy, and stock release to make sure that the amount of inventory taken from the shelves is the same as the amount listed in the invoice. Littleton bills the customer for the goods released from the warchouse department. Littleton prepares the sales journal and makes the journal voucher. The journal voucher is sent to the general ledger department. The stock release is sent to the inventory control. The invoice is then filed in the billing department's file and the ledger copy is sent to the general ledger department. The shipping department receives the invoice and the shipping notice. They send the goods to the carrier along with the invoice, the packing slip, and the two copies of the bill of lading. The invoice states the amount and quantity of goods that the customer requested in the sales order form. The shipping department files the shipping notice from the customer's order Inventory control receives the stock release form from the billing department. With the stock release form, Bobby Higgins, the inventory clerk, updates the inventory subsidiary ledger relating to the goods that have been released from the warehouse. The ledger copy ledger. Periodically, Fielder prepares the accounts receivable summary and reconciles it ledger. These three forms are then filed by Fielder The Cash Receipts System with their payment. This allows Craig Nelson, the mail room clerk, to collect the receipts in the cash receipts journal. Nelson prepares the deposit slips for the funds to be arrives at the general ledger department from the billing department. Dave Fielder, the general ledger clerk, uses the ledger copy to update the accounts receivable subsidiary with the journal voucher from the inventory subsidiary ledger and the journal voucher produced by the sales journal in the billing department in order to update the general The cash receipts system starts when the wholesalers send back the remittance advice payment from the customer and process the cash receipt. Nelson then records the cash deposited into the bank along with the checks. The remittance advice is sent to the general ledger department to update the accounts receivable records and is then filed in the billing department. Finally, Nelson prepares the cash receipt journal, out of which comes a joumal voucher that is sent to the general ledger department Luis Gonzalez, the general ledger clerk, prepares the account summary and journal voucher, which is used to update the general ledger. The account summary and journal voucher is put into the files for reoord. Gonzalez uses the remittance advice copy sent from the mail room, the deposit slip copy from the bank, and the journal voucher from the account summary to reconcile the deposit slips. He then reconciles the deposit slips from the bank with the totals from the accounts receivable and mail room. EXPENDITURE CYCLE Purchase System Inventory control department receives a list of items in inventory and total amounts in each category. The inventory control hand for all gloves (softball, infielder, outfielder, catcher, and pitcher). The quantity-on- hand of each inventory is calculated by the inventory control system, called PICS (Physical Inventory Control Scanner). PICS is an automated computer system used to clerk, Keith Fernando, is given the quantity-on- determine the quantity-on-hand of inventories at specific times. It scans in the inventory when received in the receiving department and scans it out upon shipment in order to update the quantity-on-hand. As each inventory item is updated, Femando chocks to see if the quantity-on-hand drops to the predetermined reorder point. If this is the case Fernando prepares a purchase requisition (PR). Two copies of the purchase requisition are made. One is sent to purchasing to be used to prepare a purchase order (PO) at a later date. Inventory control department keeps the other copy and waits for a copy of the purchase order from purchasing in order to reconcile the amounts on the PR with the amounts on the PO Inventory control department receives a copy of the purchase order from purchasing and compares it to the second copy of the purchase requisition. These two forms are kept in an open purchase requisition file that is filed by purchase requisition number and kept in an open account until notification that the items have been received by the receiving department via the receiving report (RR). The RR is then compared with the PO and PR to make sure that the items received are identical to the items ordered. These three forms are posted to the inventory ledger and a summary report is generated and sent to the general ledger department. The receiving report, purchase order, and purchase requisition are then kept in a closed purchase requisition file by purchase requisition number Purchasing department receives the purchase requisition from inventory control, sorts the purchase requisitions, and prepares a multi-part purchase order. The purchasing manager, Jack Tucker, chooses the supplier based on the five-supplier list given by management. One copy of the PO is sent to inventory control department, where Fernando keeps it in the open purchase requisition file. One copy is sent to the accounts payable (AP) department to be filed in the accounts payable pending file. Another copy is sent to the receiving department to be filed until the inventories arrive. One copy is mailed to the supplier. The last copy is kept in purchasing and is filod along with the purchase requisition received by inventory control in the open purchase order file, awaiting the receiving report sent by the receiving department to confirm that inventories have been received. Purchasing department is sent an invoice by the supplier through the mail that charges Triple Play the dollar amount for the inventories requested. This is kept in the open purchase onder file until the receiving report is received. When the receiving report is received, the purchase order, purchase requisition, and supplier's invoice are taken out of the open purchase order file and the amounts are then compared with those on the receiving report. All four of these reports are then filed in the closed purchase order file sorted by purchase order number. Purchasing department then sends a message through a computer terminal to the accounts payable department that is a copy of the invoice and simply states the quantity and price of the shipment received. The message is received by a computer terminal in the accounts payable department. Only the purchasing keyboard clerk, Lenny Sipowicz, can access the terminal, and only he knows the password needed to enter into the system. The same authority is given to the accounts payable keyboard clerk, Danny Thomson. The message is sent to accounts payable usually two days later, after reconciling the PO, PR, RR, and supplier's invoice. The receiving department receives the goods and reconciles the information on the packing slip attached to the shipment with the information (such as quantity and price) ted on the purchase order which was sent by purchasing department and has been filed temporarily. The receiving clerk, Manuel Barriero, pulls the PO from the file and checks to see that the inventory received is the same as the quantity and price information on PO. After checking that the information is correct, Barriero prepares a receiving report stating that the merchandise was received. One copy of the receiving report accompanies the physical inventories to the warchouse. Another copy is reconciled with the open PO file. A third copy is sent to inventory reconciled with the open PR file. A fourth copy is sent to accounts payable and is filed with the purchase order in the AP pending file. The last copy is filed with the purchase order and packing slip in the receiving department. the sent to purchasing and is control and is Accounts payable department receives a message from purchasing department through the terminal, stating that the invoice has been received. Accounts payable has also received and is temporarily keeping the PO and RR in the AP pending file. When the message about the invoice is received through the terminal, the accounts payable clerk Ivan Pushkin Rodriguez, records the liability and reconciles the information with the PO and RR in the AP pending file. After Pushkin records the liability, he sends the PO, RR and copy of invoice to the open AP file. He also enters the information in the purchases journal and accounts payable subsidiary ledger and then prepares a which is sent to the general ledger department journal voucher, edger department receives a journal voucher from accounts payable ledger summary from inventory control denartment. The general ledger ofne Cratchit, reconciles the journal voucher and ledger summary and posts to the control accounts in the general ledger. The journal voucher and ledger department and a clerk, Ozzie inventory and AP summary are then filed Cash Disbursements System Each day, The cash disbursements process begins with the accounts payable department. the AP clerk, Pushkin searches the open AP file (including the PO, RR, and invoice) to any items that are due and sends these three forms (known as the voucher packet) to cash disbursements department. The voucher packet is received by Wally Mayfield, the cash disbursements clerk. Mayfield reviews the documents for completeness and accuracy and then prepares two copies of the check to be disbursed. Mayfield signs the check and records the information in the cash disbursement journal, which produces a journal vouc sent to the general ledger department One copy of the signed check is sent to supplier, while the other copy is kept in the cash disbursements file. Mayfield then marks the voucher packet as paid and returns it to the accounts payable department. Upon receipt of the voucher packet from cash disbursements department, which states the amount of the check that was disbursed, the accounts payable department the liability by updating the AP subsidiary ledger and keeps the voucher packet in the then removes closed AP file. Finally, the AP clerk, Rodriguez send a ledger summary to the general ledger department The general ledger clerk, Cratchit reconciles the journal voucher and ledger summary and posts to the cash and AP control accounts in the general ledger. The journal voucher and ledger summary are then filed CASE REQUIREMENTS* answer Analyze the current system and prepare a document flowchart of the current system for the revenue and expenditure cycles. Use MS Excel. (30 points) Analyze the current system and identify specific internal control problems. Use MS Word. (30 points) 2. Create Company, record transactions, and print checks and financial statements using MS Office Accounting 2008. (40 points, See next page.) 3. Email with file attachments by the scheduled due date