Barbara was a regular shopper at Egeeay Supermarket, which was part of a large nationwide supermarket chain. She was there at least once a week and sometimes more often if the specials were really good. When Barbara was there this week, she slipped on some grapes in the pet-food section in aisle 3, slipping and falling, and breaking her ankle. The store manager was not sure how the grapes got there or how long they had been there, but store policy was to do checks every 15 minutes of the floor in the fruit section. The store manager indicated that there were a number of spillages every week in the green grocery section of the store. The store owner wishes to know: a) If they do, has it breached that duty of care

Barbara was a regular shopper at Egeeay Supermarket, which was part of a large nationwide supermarket chain. She was there at least once a week and sometimes more often if the specials were really good. When Barbara was there this week, she slipped on some grapes in the pet-food section in aisle 3, slipping and falling, and breaking her ankle. The store manager was not sure how the grapes got there or how long they had been there, but store policy was to do checks every 15 minutes of the floor in the fruit section. The store manager indicated that there were a number of spillages every week in the green grocery section of the store. The store owner wishes to know: a) If they do, has it breached that duty of care

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter9: Payroll Accounting: Employer Taxes And Reports

Section: Chapter Questions

Problem 1EC

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Barbara was a regular shopper at Egeeay Supermarket, which was part of a large nationwidesupermarket chain. She was there at least once a week and sometimes more often if the specials werereally good.When Barbara was there this week, she slipped on some grapes in the pet-food section in aisle 3,slipping and falling, and breaking her ankle. The store manager was not sure how the grapes got thereor how long they had been there, but store policy was to do checks every 15 minutes of the floor inthe fruit section. The store manager indicated that there were a number of spillages every week in thegreen grocery section of the store.The store owner wishes to know:a) Whether Egeeay Supermarket owes a duty of care to Barbara? b) If they do, has it breached that duty of care?c) Whether your answer would be different if Barbara had slipped on some grapes in the fruit sectionof the store.
Barbara was a regular shopper at Egeeay Supermarket, which was part of a large nationwide supermarket chain. She was there at least once a week and sometimes more often if the specials were really good. When Barbara was there this week, she slipped on some grapes in the pet-food section in aisle 3, slipping and falling, and breaking her ankle. The store manager was not sure how the grapes got there or how long they had been there, but store policy was to do checks every 15 minutes of the floor in the fruit section. The store manager indicated that there were a number of spillages every week in the green grocery section of the store. The store owner wishes to know: a) Whether Egeeay Supermarket owes a duty of care to Barbara?
Dylan worked for a propane gas distributor as an accounting clerk in a small Midwestern town. Last winter, his brother Mike lost his job at the machine plant. By January, temperatures were sub-zero, and Mike had run out of money. Dylan saw that Mike’s account was overdue, and he knew Mike needed another delivery to heat his home. He decided to credit Mike’s account and debit the balance to the parts inventory because he knew the parts manager, the owner’s son, was incompetent and would never notice the extra entry. Months went by, and Dylan repeated the process until an auditor ran across the charges by chance. When the owner fired Dylan, he said, “If you had only come to me and told me about Mike’s situation, we could have worked something out.” Requirements What can a business like this do to prevent employee fraud of this kind? What effect would Dylan’s actions have on the balance sheet? The income statement? How much discretion does a business have with regard to accommodating…
Dylan worked for a propane gas distributor as an accounting clerk in a small Midwestern town. Last winter, his brother Mike lost his job at the machine plant. By January, temperatures were sub-zero, and Mike had run out of money. Dylan saw that Mike’s account was overdue, and he knew Mike needed another delivery to heat his home. He decided to credit Mike’s account and debit the balance to the parts inventory because he knew the parts manager, the owner’s son, was incompetent and would never notice the extra entry. Months went by, and Dylan repeated the process until an auditor ran across the charges by chance. When the owner fired Dylan, he said, “If you had only come to me and told me about Mike’s situation, we could have worked something out.” Requirements What can a business like this do to prevent employee fraud of this kind? What effect would Dylan’s actions have on the balance sheet? The income statement?
Madam Lorraine’s daughter Maame Efua has just completed Senior High School and due to the Covid 19 pandemic that led to the closure of universities, she has been helping with record keeping at her mother’s convenient mini Mart. Maame Efua took responsibility of recording her mother’s purchases of goods from suppliers (both on credit and cash basis) and also issues receipts to customers when they buy goods. The policy of the shop is cash sales only. Prior to Maame Efua assisting her mom, Mr. Fred, an accountant used to visit the shop two days after the end of the month to check Madam Lorraine’s purchase invoices, bank deposits, cash at hand, etc in order to prepare the financial records for the month for a small fee. He also assists with records to be sent to the tax authorities and make the necessary payments. Having now been conversant with the amount of sales per day and the month, and also recording all the purchases, Efua believes she is able to determine how much profit her mother…
Linda Malloy is a CPA with a passion for animals and volunteers 15 hours a week at an animal shelter. While she was originally asked to provide pro bono auditing help, these days she only provides hands-on care for abandoned and rescued puppies. One Saturday the shelter's director tells Linda that the puppies seem very agitated, and adds, "It's almost like they know what dire financial straits we are in right now and they are worried about landing back on the streets again." Linda senses an opportunity, and calls a friend she thinks might be interested in purchasing the shelter. She tells her friend, "I bet you can get the place for well under market value, since the owner is really stressed and needs to sell quickly." Which of the following statements is true? Select one: As a CPA, Linda is not permitted to provide volunteer or pro bono services, so has made a per se violation of the AICPA Code of Professional Conduct. Regardless of the physical labor she is providing at the…
You are working as a summer intern at a rapidly growing organic food distributor. Part of your responsibility is to assist in the accounts payable department. You notice that most bills from suppliers are not paid within the discount period. The manager of accounts payable says the bills are organized by vendor, like the accounts payable ledger, and she is too busy to keep track of the discount periods. Besides, the owner has told her that the 1% and 2% discounts available are not worth worrying about.
Catherine Romanov was a loan officer who needed one last loan to make her quota for the month. Yvonne Gunner, who was only a freshman in college, walked in one day for a loan for a new software business she was starting. She had never dealt with banks before and did not understand the nuances of loans but asked very good questions. Ms. Romanov, however, was ruthless and intentionally did not answer the questions accurately. Had Ms. Gunner received accurate answers to her questions, she would not have taken the loan. After six months, Ms. Gunner defaulted on the loan, and the bank pursued her for payment. Does Ms. Gunner have any remedies?
Lena, Carrie, and Margaret work for a family physician. The doctor is knowledgeable about office management practices and has segregated the cash receipt duties as follows: Lena opens the mail and prepares a triplicate list of money received. Lena sends one copy of the list to Carrie, the cashier, who deposits the receipts daily in the bank. Margaret, the recordkeeper, receives a copy of the list and posts payments to the patients' accounts. About once a month, the office clerks have an expensive lunch they pay for as follows. First Carrie endorses a patient's check in the doctor's name and cashes it at the bank. Lena then destroys the remittance advice accompanying the check. Finally, Margaret posts payment to the customer's account as a miscellaneous credit. The three justify their actions by their relatively low pay and knowledge that the doctor will likely never miss the money. Would a bank reconciliation uncover this office fraud?
Lena, Carrie, and Margaret work for a family physician. The doctor is knowledgeable about office management practices and has segregated the cash receipt duties as follows: Lena opens the mail and prepares a triplicate list of money received. Lena sends one copy of the list to Carrie, the cashier, who deposits the receipts daily in the bank. Margaret, the recordkeeper, receives a copy of the list and posts payments to the patients' accounts. About once a month, the office clerks have an expensive lunch they pay for as follows. First Carrie endorses a patient's check in the doctor's name and cashes it at the bank. Lena then destroys the remittance advice accompanying the check. Finally, Margaret posts payment to the customer's account as a miscellaneous credit. The three justify their actions by their relatively low pay and knowledge that the doctor will likely never miss the money. What went wrong with the doctor's internal controls?
Jane Marks has a restaurant in which she accepts credit cards and checks.Several of the places that Jane shops now accept debit cards and do notaccept checks. Jane’s banker explained that a debit card would immediatelytransfer money into her account, but it would cost $50 per monthfor the equipment and bank charges. Although she requires proper identification,Jane loses approximately $590 a year as a result of bad checks.She also determined that on average, she loses 115 days of interest onall checks because the banks are closed on 11 holidays and weekends (52 weeks * 2 weekend days = 104 + 11 holidays). Jane currently earns3 percent interest on her bank accounts and accepts an average of $2,000 aday in checks.a. What is the total annual cost to Jane for the debit card service?b. What is the benefit?c. Should Jane implement the system?
Boxes-and-Stuff, a box-packing and mailing company in a small town along the Gulf Coast, lost a key employee last month when its accounting manager was fired for embezzling company money. Now, the owners of Boxes-and-Stuff, Jerome and Natalia, need to find another accounting manager—fast. But as they hurry to fill the position, they don’t want to select a dishonest or incompetent employee. They need to be cautious. Fortunately, the police chief found the embezzled funds in a bank account set up by the former employee and authorized the return of the money. This means that Boxes-and-Stuff will not lose the embezzled amount, after all. However, Jerome and Natalia are already thinking of ways to protect their company from other risks. They want to be prepared for risky situations in the future. 1. Which risks do you think Boxes-and-Stuff might face? 2. How do you think the company should handle the risks you’ve identified?