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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
Donated equipment for which the fair value has been determined should be recorded as a debit to the appropriate equipment account and a credit to:
Richard was required to pay Alice $1,500 per month of which $600 was designated as child support. He made 12 such payments in 2009. Assuming that Alice has no other income, her tax return for 2009 should show gross income of:
The Internal Revenue Code allows some accountable events to be considered differently for income tax reporting purposes and financial accounting purposes, while other accountable events must be reported the same. Identify an event related to inve..
At December 31, 2009, M's unadjusted balance of liability for compensated absences was $30,000. M estimated that there were 200 vacation days available at December 31, 2009. M's employees earn an average of $150 per day. In its December 31, 2009, ..
Identify the limitation of the internal control system. Provide at least 3 limitations. Provide at least 2 examples of internal control procedures and explain how these procedures can be implemnted. Identify symptoms of a lack of internal control.
Which of the following statements concerning consolidated financial statements is true?
Which of the following would not be included in the Lease Receivable accounts?
Fixed costs are $400,000 and the contribution margin per unit is $80. What is the break-even point?
Obtain at least two years of financial information pertaining to General Motors company from its most recent annual report (10-K).
Put in holding company in exchange for 1 million in p/s and 800,000 in debt, what are the tax consequences?
Assuming the only changes in retained earnings in 2009 were for net income and a $50,000 dividend, what was net income for 2009?
On the problems you just completed for me, how did you come up with the cost price to the retailer of $7.11? I understand the profit margin is 40% so wouldn't that mean that 9.95*.60=5.97 would be the cost to retailer?
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