This Website Has Been Moved to a New Link


Loading

ACC280 WEEK5 E8-5 E15-1 E15-2 E15-11

Price: $4.99


E8-5 Listed below are five procedures followed by The Beat Company.

1. Several individuals operate the cash register using the same register drawer.
2. A monthly bank reconciliation is prepared by someone who has no other cash responsibilities.
3. Ellen May writes checks and also records cash payment journal entries.
4. One individual orders inventory, while a different individual authorizes payments.
5. Unnumbered sales invoices from credit sales are forwarded to the accounting department
every four weeks for recording.

Instructions
Indicate whether each procedure is an example of good internal control or of weak internal control.
If it is an example of good internal control, indicate which internal control principle is being
followed. If it is an example of weak internal control, indicate which internal control principle is
violated. Use the table below.

E15-1 Financial information for Blevins Inc. is presented below.

  2009 2008
Current assets   125,000  100,000
Plant assets (net)   396,000  330,000
Current liabilities   91,000  70,000
Long-term liabilities   133,000  95,000
Common stock, $1 par   161,000  115,000
Retained earnings   136,000  150,000

Instructions
Prepare a schedule showing a horizontal analysis for 2009 using 2008 as the base year.

E15-2 Operating data for Gallup Corporation are presented below.
20092008
Net sales  750,000 600,000
Cost of goods sold  465,000 390,000
Selling expenses  120,000 72,000
Administrative expenses  60,000 54,000
Income tax expense  33,000 24,000
Net income  72,000 60,000

Instructions
Prepare a schedule showing a vertical analysis for 2009 and 2008
Instructions
Prepare a schedule showing a vertical analysis for 2009 and 2008.

E15-11 Scully Corporation’s comparative balance sheets are presented below.
Scully Corporation
Balance Sheets
31-Dec
20082007
Cash  4,300 3,700
Accounts receivable  21,200 23,400
Inventory  10,000 7,000
Land  20,000 26,000
Buildings  70,000 70,000
Accumulated depreciation (15,000) (10,000)
 Total  110,500 120,100
Accounts payable  12,370 31,100
Common stock  75,000 69,000
Retained earnings  23,130 20,000

 Total  110,500 120,100

Scully’s 2008 income statement included net sales of $100,000, cost of goods sold of $60,000, and
net income of $15,000.

Instructions
Compute the following ratios for 2008.
(a) Current ratio.
(b) Acid-test ratio.
(c) Receivables turnover.
(d) Inventory turnover.
(e) Profit margin.
(f) Asset turnover.
(g) Return on assets.
(h) Return on common stockholders’ equity.
(i) Debt to total assets ratio.

No comments:

Post a Comment