Aldstadt Company has the following internal control procedures over cash receipts

ACC 290 Week 5 Assignment

BE7-4 Aldstadt Company has the following internal control procedures over cash receipts. Identify the internal control principle that is applicable to each procedure.

(a) All over-the-counter receipts are registered on cash registers.
(b) All cashiers are bonded.
(c) Daily cash counts are made by cashier department supervisors.
(d) The duties of receiving cash, recording cash, and having custody of cash are assigned to different individuals.
(e) Only cashiers may operate cash registers.

Click here for the solution: Aldstadt Company has the following internal control procedures over cash receipts

(Bank reconciliation and internal control) The records of Parker Company indicate a July 31 cash balance of $10,400, which includes undeposited receipts for July 30 and 31

CP 8-5 Bank reconciliation and internal control (25th edition)

The records of Parker Company indicate a July 31 cash balance of $10,400, which includes undeposited receipts for July 30 and 31. The cash balance on the bank statement as of July 31 is $10,575. This balance includes a note of $2,250 plus $150 interest collected by the bank but not recorded in the journal. Checks outstanding on July 31 were as follows: No. 2670, $1,050; No. 3679, $675; No. 3690, $1,650; No. 5148, $225; No. 5149, $750; and No. 5151, $800. On July 25, the cashier resigned, effective at the end of the month. Before leaving on July 31, the cashier prepared the following bank reconciliation:


Cash balance per books, July 31 .................................... $10,400

Add outstanding checks:
No. 5148 ........................................................ $225


5149 ........................................................ 750

5151 ........................................................ 800 1,675

$12,075


Less undeposited receipts ......................................... 1,500

Cash balance per bank, July 31 ..................................... $10,575

Deduct unrecorded note with interest .............................. 2,400

True cash, July 31.................................................. $ 8,175


Calculator Tape of Outstanding Checks:

0*

225

750

800

1,675*


Subsequently, the owner of Parker Company discovered that the cashier had stolen an unknown amount of undeposited receipts, leaving only $1,500 to be deposited on July 31. The owner, a close family friend, has asked your help in determining the amount that the former cashier has stolen.


1. Determine the amount the cashier stole from Parker Company. Show your computations in good form.

2. How did the cashier attempt to conceal the theft?

3. a. Identify two major weaknesses in internal controls, which allowed the cashier to steal the undeposited cash receipts.

b. Recommend improvements in internal controls, so that similar types of thefts of undeposited cash receipts can be prevented.

Click here for the solution: (Bank reconciliation and internal control) The records of Parker Company indicate a July 31 cash balance of $10,400, which includes undeposited receipts for July 30 and 31

ACC 225 Week Eight (Week 8) Solution

ACC 225 Week Eight (Week 8) Solution

CheckPoint: Internal Control and Bank Reconciliations
• Resource: Fundamental Accounting Principles, pp. 335 and 336
• Due Date: Day 4 [Individual] forum
• Complete Quick Study question QS 8-6 on p. 335, and Exercises 8-3 and 8-4 on p. 336.
• Post your answers as an attachment.

Assignment: Internal Control and Bank Reconciliations
• Resource: Fundamental Accounting Principles, pp. 338 and 339
• Due Date: Day 7 [Individual] forum
• Complete Problems 8-1A, 8-3A, and 8-4A (including the Analysis Component) on pp. 338-339. When responding to the cases in 8-1A, be sure to think critically about each case. Identify the principles of internal control that has been violated, and give an explanation of why you think that principle has been violated. Identify the consequences of the actions described in the cases. Make a recommendation for what the business should do to ensure adherence to principles of internal control.
• Use the spreadsheet in Appendix B available on aXcess to complete Problem 8-4A. Be sure to use the tabs labeled SP08-04A and Given P08-04A
Click here for the solution: ACC 225 Week Eight (Week 8) Solution