User Please note that this discussion board will require a minimum of three posts. These consist of your initial post, your response to comments that I post to your thread, and at least one response to a classmate. If you post late in the week, it's possible that I may not be able to provide a comment to you. In that case, please be sure to provide response posts to at least two classmates. Please consider the scenario below and be aware of poor internal controls over inventory. The City of Milford Parks and Recreation Department operates three community swimming pools. Each pool has a concession stand that sells candy. Each concession stand is staffed with two workers. To be eligible for volume discounts, the Parks and Recreation Department orders the candy for all three pools. Sandy Wells is responsible for ordering the concession stand goodies. Sandy uses a locked closet down the hall from her office at the Parks and Recreation headquarters to store the candy. She checks the closet periodically, and, when supplies seem low, she orders more. Whenever a concession stand needs to restock inventory, a worker goes to the Parks and Recreation headquarters to get the needed candy. Because Sandy knows all of the concession workers, she usually just hands the worker the key to the candy closet so the worker can get whatever is needed. Sandy has attached a chart to the closet door to keep track of candy withdrawals. On that chart, each worker records the number of boxes of candy that he or she is taking and the pool to which it is going. By the end of the summer, Sandy becomes worried that someone else has a key to the candy closet. The candy seems to be disappearing more quickly than it did at the beginning of the summer. For the last month or so, she hasn't found time to compare the withdrawals on her chart with candy purchases, but something just doesnt seem right. Required: Please identify the control problems, and suggest how to correct the inappropriate inventory procedures. Responses to Classmates: Please add information to the threads of your classmates identifying additional control issues or make suggestions about adding better control procedures. Response to Instructor: Please check your thread for questions or comments from me and provide a comprehensive response, as requested. Writing: Please make sure that your initial post contains a properly cited reference. Please use APA style. You should cite your text as a minimum. Additionally, check your spelling and proofread your post before you hit the submit button. Use the following to respose to the request above: This week we will begin our work in Chapter 6 which will deals with Inventory. Inventory is an asset that can shrink due to employee and consumer theft. Inventory control is achieved by safeguarding the inventory from damage and theft and by the accurate reporting of inventory in the financial statements. Purchase orders which authorize the acquisition of inventory must be matched with receiving reports to establish that merchandise ordered is the same as what is received. The amount of inventory is always available when using a perpetual inventory system. A physical inventory should be taken toward the end of the year. After determining the inventory on hand, the cost of inventory is assigned for reporting on the balance sheets. Security cameras, locked show cases, and inventory control tags assist in controlling the inventory and in limiting theft. The physical purchase and sale of inventory may not follow the cost flow assumption used. The cost flow assumption is just for accounting purposes. Three common cost flow assumptions are as follows: The first-in, first-out (FIFO) method assumes that items are sold in the same order they are purchased. The last-in, first-out (LIFO) method assumes that the last item purchased is the first item sold. The weighted average cost method assumes that the costs of all the items are added together, and then divided by the number of items, resulting in an average cost per item. All items sold are assumed to have the same cost, so it doesnt matter in what order they are sold. There is one additional inventory cost flow method: the specific identification method. Each item of inventory is uniquely identified and tracked with a specific purchase. This method is not practical unless each inventory item can be specifically identified. Car dealers often use this method because each car is identified with a vehicle identification number (VIN). It may be helpful to imagine the sales of the products below and how they flow according to the inventory cost flow assumptions just noted: FIFOMilk (or any perishable item). When shelves are restocked, the older milk is moved to the front, and the newer milk is placed in back to encourage customers to buy the older milk first. LIFOPackages of nails or screws at a hardware store. When shelves are restocked, the older packages are slid to the back of the shelf or rack and the newer packages placed in front. Customers buy the newest hardware first. Weighted AverageGasoline. When new gasoline is delivered to a gas station, it is dumped into the tank with any old gas that has not been sold. Therefore, the customer is buying a mixture of old and new gas. It is important to note that a companys inventory costing method does not have to match how the products are actually sold