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Saint Leo MBA 560 week 2 homework




Question;Problem 3-25Comprehensive cycle problem: Perpetual system;At the beginning of 2012, the Jeater Company had the;following balances in its accounts;During 2012, the company experienced the following events.;1. Purchased inventory that cost $2,200 on account from Blue;Company under terms 1/10, n/30. The merchandise was delivered FOB shipping;point. (Edmonds. Survey of Accounting.;2012);Freight costs of $110 were paid in cash.;2. Returned $200 of the inventory that it had purchased;because the inventory was damaged in transit. The freight company agreed to pay;the return freight cost.;3. Paid the amount due on its account payable to Blue;Company within the cash discount period.;4. Sold inventory that had cost $3,000 for $5,500 on;account, under terms 2/10, n/45.;5. Received merchandise returned from a customer. The;merchandise originally cost $400 and was sold to the customer for $710 cash;during the previous accounting period. The customer was paid $710 cash for the returned;merchandise.;6. Delivered goods FOB destination in Event 4. Freight costs;of $60 were paid in cash.;7. Collected the amount due on the account receivable within;the discount period.;8. Took a physical count indicating that $7,970 of inventory;was on hand at the end of the accounting;period.;Required;a. Identify these events as asset source (AS), asset use;(AU), asset exchange (AE), or claims exchange(CE).;b. Record each event in a statements model like the;following one. (Edmonds. Survey of;Accounting. 2012).;c. Prepare an income statement, a statement of changes in;stockholder? equity, a balance sheet, and a statement of cash flows.;Problem 4-23Bank reconciliation and internal control;Following is a bank reconciliation;for Surf Shop for June 30, 2012;When reviewing the bank reconciliation, Surf?s auditor was;unable to locate any reference to the NSF check on the bank statement.;Furthermore, the clerk who reconciles the bank account and records the adjusting;entries could not find the actual NSF check that should have been included in;the bank statement. Finally, there was no specific reference in the accounts;receivable supporting records;identifying a party;who had written a bad check.;Required;a. Prepare a corrected bank reconciliation.;b. What is the total amount of cash missing, and how was the;difference between the ?true cash? per the bank and the ?true cash? per the;books hidden on the reconciliation prepared by the former employee?;c. What could Surf?s Shop do to avoid cash theft in the;future? (Edmonds. Survey of Accounting.;2012)


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