Correcting internal control weakness
Each of the following situations has an internal co...
Correcting internal control weakness
Each of the following situations has an internal control weakness.
Upside-Down Applications develops custom programs to customer’s specifications. Recently, the development of a new program stopped while the programmers redesigned Upside-Down’s accounting system. Upside-Down’s accountants could have performed this task.
Norma Rottler has been your trusted employee for 24 years. She performs all cash- handling and accounting duties. Ms. Rottler just purchased a new luxury car and a new home in an expensive suburb. As an owner of the company, you wonder how she can afford these luxuries because you pay her only $30,000 a year and she has no source of outside income.
Izzie Hardwoods, a private company, falsified sales and inventory figures in order to get an important loan. The loan went through, but Izzie later went bankrupt and could not repay the bank.
Answers: 2
Business, 21.06.2019 14:20
Gemini inc.'s optimal cash transfer amount, using the baumol model, is $60,000. the firm's fixed cost per cash transfer of marketable securities to cash is $180, and the total cash needed for transactions annually is $960,000. on what opportunity cost of holding cash was this analysis based?
Answers: 1
Business, 21.06.2019 18:30
2. high-glow currently produces 1,000 bicycles per month. the following per unit data apply for sales to regular customers: direct materials $50 direct manufacturing labor 5 variable manufacturing overhead 14 fixed manufacturing overhead 10 total manufacturing costs $79 the plant is experiencing demand shortage and is considering reducing production to 800 bicycles. what is the per unit cost of producing 800 bicycles? a) $79 per unit b) $81.50 per unit c) $74 per unit d) $69 per unit
Answers: 2
Business, 21.06.2019 23:30
Martha is the head of the accounts department in a small manufacturing company. the company follows the accrual-basis method of accounting. it recently purchased raw materials worth $5,000 from its vendors. however, the company paid only $3,000 to its vendors. it plans to pay the remaining amount after three months. considering this information, which entry should martha record in the company’s accounts? a. $5,000 as accounts receivable b. $3,000 as accounts payable c. $2,000 as accounts payable d. $2,000 as accounts receivable
Answers: 3
Business, 22.06.2019 07:00
Pennewell publishing inc. (pp) is a zero growth company. it currently has zero debt and its earnings before interest and taxes (ebit) are $80,000. pp's current cost of equity is 10%, and its tax rate is 40%. the firm has 10,000 shares of common stock outstanding selling at a price per share of $48.00. refer to the data for pennewell publishing inc. (pp). pp is considering changing its capital structure to one with 30% debt and 70% equity, based on market values. the debt would have an interest rate of 8%. the new funds would be used to repurchase stock. it is estimated that the increase in risk resulting from the added leverage would cause the required rate of return on equity to rise to 12%. if this plan were carried out, what would be pp's new value of operations? a. $484,359 b. $521,173 c. $584,653 d. $560,748 e. $487,805
Answers: 1
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