10 3 21 12 39 PM Chapter 4 Homework Graded Sueiro Khoa Nguyen Student Khoa Nguyen Date 10 03 21 Instructor Alexander Sueiro Course ACG2021 Fall 2021 Sueiro Assignment Chapter 4 Homework Graded Sueiro 1 manages Lucas Manufacturing Hembley Camile Hembley company This employee receives cash from clients and also prepares the monthly bank reconciliation To check up on the employee 1 Click the icon to view the bank reconciliation Does it appear that the employee has stolen from the company If so how much Explain your answer Which side of the bank reconciliation shows the company s true cash balance fears that a trusted employee has been stealing from the prepares her own bank reconciliation as follows Hembley It appears the employee has stolen 795 The adjusted bank company s books show more cash on hand Therefore the books must be incorrect balance is the company s true cash balance and the 1 Bank reconciliation Lucas Manufacturing Bank Reconciliation January 31 2018 Add Less Bank Books Balance January 31 4 100 Balance January 31 4 080 Deposits in transit 600 Bank collections Add Less Interest revenue 600 30 35 Outstanding checks 820 Service charge Adjusted bank balance Adjusted book balance 3 880 4 675 2 sells memberships to the James Cooper prepare and give each customer a receipt for each membership sold The receipt forms are prenumbered personal financial problems and he kept the Cooper destroyed the Association s copy of the receipt that he gave to the customer Symphony Association The Association s procedure requires that cash received from a customer for a new membership To hide his theft Cooper is having Cooper Atlanta 500 What will alert manager Terry Reynolds that something is wrong Reynolds will notice a gap in the sequence of sales receipts for the receipt that Cooper destroyed This knowledge will lead Reynolds to investigate what happened to the missing receipt and what happened to the related cash https xlitemprod pearsoncmg com api v1 print highered 1 13 10 3 21 12 39 PM Chapter 4 Homework Graded Sueiro Khoa Nguyen 3 Answer the following questions about internal control over cash payments 1 Payment by check results in three controls over cash What are they 2 Suppose a purchasing agent receives the goods that she purchases and also approves payment for the goods How could a dishonest purchasing agent cheat the company How do companies avoid this internal control weakness 1 Payment by check results in three basic controls over cash What are they The three basic controls over cash that payment by check carries are 1 Each check provides a record of the payment source document 2 Checks must be signed by an authorized official and 3 Before signing the check the official should study the evidence supporting the payment 2 Suppose a purchasing agent receives the goods that she purchases and also approves payment for the goods How could a dishonest purchasing agent cheat the company How do companies avoid this internal control weakness Choose the correct option that best completes this sentence A dishonest purchasing agent could A Purchase goods and have them delivered to her home B Approve payment by the company for goods that have been used for personal gain C Both A and B D None of the above Companies avoid this internal control weakness by separating the following duties purchasing goods receiving goods approving payments for goods https xlitemprod pearsoncmg com api v1 print highered 2 13 10 3 21 12 39 PM Chapter 4 Homework Graded Sueiro Khoa Nguyen 4 Review the following situations 2 Click the icon to view the situations Requirement 1 Identify the internal control weakness in each situation State how the person can hurt the company a Chen prepares the purchase order and also receives the goods She can add some items to the purchase order and have them shipped to a location she controls When the goods come in she checks the incoming shipment so there is no outside party to learn of her dishonesty b Frabotta has access to the cash collected and she also prepares the cash report With access to the cash collected and reported Frabotta can steal cash and falsify her cash report to conceal her theft 2 Situations a b is the purchasing agent for Emily Chen Industries division managers of the company She faxes the purchase order to suppliers who then ship the goods to Chen receives each incoming shipment and checks it for agreement with the purchase order and the related invoice She then routes the goods to the respective division managers and sends the receiving report and the invoice to the accounting department for payment prepares purchase orders based on requests from Wilson Wilson Chen works as a security guard at Chris Frabotta box where customers pay for parking Each night that parked on the lot and b the day s cash receipts the figures by multiplying the number of cars by the parking fee per car PARKFAST parking in Frabotta prepares the cash report that shows a the number of cars Holly Van bookkeeper checks Frabotta s PARKFAST Van then deposits the cash in the bank St Louis Frabotta has a master key to the cash https xlitemprod pearsoncmg com api v1 print highered 3 13 10 3 21 12 39 PM Chapter 4 Homework Graded Sueiro Khoa Nguyen 5 The following situations describe two cash payment situations and two cash receipt situations In each pair one set of internal controls is better than the other 3 Click the icon to view the situations Requirement 1 Evaluate the internal controls in each situation as strong or weak and give the reason for your answer Cash receipts a Samson Carpet Mill Auto Parts has weak internal controls There is not a good separation of duties The same person receives cash records the cash and deposits the cash Liberty Dermatology Clinic b Different people receive cash record the cash and deposit the cash internal controls There is strong has a good separation of duties Cash payments a Scott Construction has strong internal controls There is a good separation of duties Supervisors request the equipment and the home office purchases the equipment Remington Home Construction b not a good separation of duties has weak internal controls There is Supervisors request the equipment and purchase the equipment with little oversight 3 Situations Cash receipts a At Samson Carpet Mill cash received by mail goes straight to the bookkeeper who debits Cash and credits Accounts Receivable to record the collections from customers The bookkeeper then deposits the cash in the