Reference no: EM132973627
Task 1
For each scenario below, state the appropriate cash control procedure that should be implemented. Be sure to also explain, in detail, the procedure and its importance.
On Friday of every week, K. Chiarelli deposits the week's cash received.
Lisetta was instructed by her manager to pay for a purchase invoice for merchandise, $500, with cash from the cash register.
Jamal is the sales clerk in a small retail business. Each day, he records the cash received and issues sales slips to customers.
Theo owns a convenience store. He checks support documents against cash received when he has time-at least once a week.
Task 2
For this task assist the company in identifying if any errors are present by preparing a bank reconciliation statement.
On August 31, 20--, R. Johnson Co. has a balance of $2 240 in its ledger cash account. The bank statement received from their bank shows a balance of $1 574.75.
The bank statement contains a deduction of $10.60 for bank service charges. A comparison of the cheques issued and recorded in the journal of the company and the cheques paid for on the bank statement indicates that Cheque 72 for $48.60, Cheque 86 for $250, and Cheque 89 for $46.75 are outstanding. A deposit made on August 30 for $1 000 was not shown on the bank statement.
do bank reconciliation statement.
Task 3
For this task, act like as a loan manager. Ms. Gonzalez, from AJ Services has made an appointment with you to discuss the possibility of expanding her business. She needs to borrow $30 000 from the bank to help her with the costs of expansion. Her accountant has put together the following information based on the company's financial statements over the last four years.
You are a loan manager and have received an application for a loan from J. Truman Ltd. From the financial statements provided by J. Truman, the following data have been calculated. Using the same word processing file as from Task 1, answer the following questions.
Examine and conduct an analysis of the information provided. Make sure to include a trend analysis for Year 1 to Year 4 for each ratio. Also make sure to explain the individual ratios and its importance for decision making.
Based on your analysis of the data provided, would you grant the loan? Yes or No? Why or Why not? Make sure to provide at least two reasons for your answer.
What other information (i.e. ratios, credit history, etc...) would be helpful to assist you in making a decision of whether or not to grant a loan? Explain in detail how this information would be useful.
Task 4
Use the following condensed statements to calculate the ratios in the table below.
Create and complete table like this one.
2. Examining the ratios that you have just calculated, provide an analysis of the liquidity and borrowing capacity of the company, along with its profitability.
Task 5
Using the following partial trial balance and a spreadsheet, create an income statement for the company for the year ending on December 31, 20--.