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the audit of the financial statements of Sango Ltd., a closely held company which manufactures and distributes a line of mid-quality furniture.You have obtained the following client-prepared description of the company's procedures and controls over the acquisition and use of production materials:All production materials are kept in a locked storeroom. Storeroom personnel consist of a supervisor and three clerks. Materials are removed from the storeroom based on requisition forms submitted to the storeroom and signed by the production foremen.The storeroom clerks maintain perpetual inventory records of goods received and issued, in both quantities and dollar amounts (first-in, first-out basis). The record for each inventory item also includes a reorder level and a predetermined economic order quantity (EOQ). If the recorded quantity on hand falls below the reorder level, the supervisor telephones the accounts payable clerk, who prepares a pre-numbered purchase order in the amount of the EOQ. The original of the purchase order is sent to the normal supplier of that item (based on multi-year contracts), while a copy is retained in the clerk's files.When ordered materials arrive at Sango, they are received by the storeroom clerks. The clerks count the goods received and compare their counts to the shipper's bill of lading and supplier's packing slip. The goods received are then entered in the perpetual records. The bill of lading and packing slip are initialled, dated, and filed by supplier name in the storeroom.When a vendor's invoice is received in the mail, the accounts payable clerk telephones the storeroom and asks if the goods have been received. If yes, the invoice is matched with the purchase order copy, checked for proper description, pricing, clerical accuracy, and so on, and temporarily filed pending payment. If the goods have not yet been received, the accounts payable clerk asks the storeroom clerk to telephone as soon as the goods are delivered so that the invoice can be processed. In the interim, the invoice is kept in one of the drawers of his desk.RequiredList three weaknesses in the existing system of internal control. For each weakness, state the risk to the company if the control is not improved, and recommend improvements. Format your answer as follows: (9 marks)Weakness Risk Recommended improvement
Determining the proper dollar valuation
The lease and move out eight months before the lease was scheduled to expire. What issues does Reginald face as a result of this transaction?
Take into account all types of compensation discussed in this chapter. Devise a strategy you feel is most appropriate for rewarding employees and executives. Describe the effect this strategy has on the financial statements, including earnings per..
Prepare an income statement, statement of changes in stockholder equity, period-end balance sheet, and statement of cashflows for the 2002 accoutning period.
When the cost behavior pattern has been identified as fixed at a certain volume of activity.
The statement provides information about resources consumed during an accounting period. The statement is dated as of a specific point in time. The amounts that are owed to other q\organizations or individuals are reported.
What is the purpose of depreciation? Does the book value of a fixed asset, cost minus accumulated depreciation, communicate to a user what the asset is worth? Should the financial statements reflect the value of fixed assets?
What makes a CPA license valuable? a. Time, effort and education it takes to get the license. b. Continuing education after receiving the license. c. Monopoly on public accounting services.
Compute the percentage increase or decrease in net sales and also in net income (net loss) from 2005 to 2007. Which item grew faster during this two-year period, net sales or net income (net loss)? Can you offer a possible explanation for these ch..
The financial statements for Jobe Inc. and Lake Corp., just prior to their combination, for the year ending December 31, 20X2, follow. Lake's buildings were undervalued on its financial records by $60,000.
Second Baptist would start a church school. And Baker would open a car dealership. If you are the financial adviser for the school district, which offer would you prefer? Why?
Allowance for Doubtful Accounts has an unadjusted balance of $1,100 at the end of the year, and an analysis of customer's accounts indicates doubtful accounts of $12,900. Which of the following records the proper provision for doubtful accounts?
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