Chapter 3, Problem 1TRP

Sue is a customer account representative for ABC Company. She recently acquired several new accounts when a previous representative, Dan, took an early retirement. Sue reviewed each of Dan’s accounts to help familiarize herself with his clients and understand how she can better serve each one’s individual needs. As she was reviewing the client list, she found a major customer she had never heard of before. Surprised that she had not yet done business with the company, she called it to introduce herself as the new representative. When Sue placed the call, she found that the reported number had been disconnected. Thinking that the customer may have done business with ABC in the past and have moved on, she reviewed the account transactions and found that the most recent transaction had taken place the week prior. During her review, she also noticed the latest transaction was for an unusually large amount for ABC. As Sue pursued her curiosity, she went to other employees to find out more…

ZPM is a listed limited liability company with a year end of June 30. ZPM’s main activity is selling home improvement of Do-It-Yourself (DIY) products to the public. Products sold range from nails, pain and tools to doors and showers: some stores also sell garden tools and furniture. Products are purchased from approximately 200 different suppliers. ZPM has 103 stores in eight different countries. ZPM has a well-staffed internal audit department, who report on regular basis to the audit committee. Areas where internal and external may carry out work include: Attending year-end inventory count in 30 stores. All are visited rotationally. Checking the internal controls over the procurement systems.  Required; For each of the above two areas, discuss; The objectives of the internal auditor; The objectives of the external auditor; and Whether the external auditor will rely on the internal auditor, and if reliance is required, the extent of that reliance.

Thomson Printing Company is a buyer and seller of used machinery. On April 10, the president of the company, James Thomson, went to the surplus machinery department of B.F. Goodrich Company in Akron, Ohio, to examine some used equipment that was for sale. Thomson discussed the sale, including a price of $9,000, with Ingram Meyers, a Goodrich employee and agent. Four days later, on April 14, Thomson sent a purchase order to confirm the oral contract for purchase of the machinery and a partial payment of $1,000 to Goodrich in Akron. The purchase order contained Thomson Printing’s name, address, and telephone number, as well as certain information about the purchase, but did not specifically mention Meyers or the surplus equipment department. Goodrich sent copies of the documents to a number of its divisions, but Meyers never learned of the confirmation until weeks later, by which time the equipment had been sold to another party. Thomson Printing brought suit against Goodrich for breach…

Marlene Grady and Pauline Monroe are partners engaged in operating The G&M Doll Shop, which has employedthe following persons since the beginning of the year:V. Hoffman (general office worker)......................... $1,700 per monthA. Drugan (saleswoman)......................................... $15,000 per yearG. Beiter (stock clerk).............................................. $180 per weekS. Egan (deliveryman).............................................. $220 per weekB. Lin (cleaning and maintenance, part-time) .......... $160 per weekGrady and Monroe are each paid a weekly salary allowance of $950.The doll shop is located in a state that requires unemployment compensation contributions of employers of one or moreindividuals. The company is subject to state contributions at a rate of 3.1% for wages not in excess of $8,100. Computeeach of the following amounts based upon the 41st weekly payroll period for the week ending October 11, 2019:a. Amount of FICA taxes (OASDI and HI)…

Read the case below and answer the questions following it.   DURAPLAST Company Ltd., opened its doors in 1979 as awholesale supplier of plumbing equipment, tools, and parts to hardware stores, home-improvement centers, and professional plumbers in the Accra-Tema Metropolitan area. Over the years they have expanded their operations to serve customers across the nation and now employ over 200 people as technical representatives, buyers, warehouse workers, and sales and office staff. Most recently DURAPLAST has experienced fierce competition from the large online discount stores such as Qualiplast and Interplast. In addition, the company is suffering from operational inefficiencies related to its archaic information system. DURAPLAST’s revenue cycle procedures are described in the following paragraphs.   Revenue Cycle   DURAPLAST’s sales department consists of 17 full-time andpart-time employees. They receive orders via traditional mail, e-mail, telephone, and the occasional walk-in.…

Read the case below and answer the questions following it.   DURAPLAST Company Ltd., opened its doors in 1979 as awholesale supplier of plumbing equipment, tools, and parts to hardware stores, home-improvement centers, and professional plumbers in the Accra-Tema Metropolitan area. Over the years they have expanded their operations to serve customers across the nation and now employ over 200 people as technical representatives, buyers, warehouse workers, and sales and office staff. Most recently DURAPLAST has experienced fierce competition from the large online discount stores such as Qualiplast and Interplast. In addition, the company is suffering from operational inefficiencies related to its archaic information system. DURAPLAST’s revenue cycle procedures are described in the following paragraphs.   Revenue Cycle   DURAPLAST’s sales department consists of 17 full-time andpart-time employees. They receive orders via traditional mail, e-mail, telephone, and the occasional walk-in.…

Marlene Grady and Pauline Monroe are partners engaged in operating The G&M Doll Shop, which has employed the following persons since the beginning of the year: V. Hoffman (general office worker) $1,700 per month A. Drugan (saleswoman) $15,000 per year G. Beiter (stock clerk) $180 per week S. Egan (deliveryman) $220 per week B. Lin (cleaning and maintenance, part-time) $160 per week   Grady and Monroe are each paid a weekly salary allowance of $950. The doll shop is located in a state that requires unemployment compensation contributions of employers of one or more individuals. The company is subject to state contributions at a rate of 3.1% for wages not in excess of $8,100. Compute each of the following amounts based upon the 41st weekly payroll period for the week ending October 11. Round your intermediate calculations and final answers to the nearest cent. Use rounded answers in subsequent computations. If an amount is zero, enter "0". a.  Amount of FICA taxes…

Marlene Grady and Pauline Monroe are partners engaged in operating The G&M Doll Shop, which has employed the following persons since the beginning of the year: V. Hoffman (general office worker) $1,700 per month A. Drugan (saleswoman) $15,000 per year G. Beiter (stock clerk) $180 per week S. Egan (deliveryman) $220 per week B. Lin (cleaning and maintenance, part-time) $160 per week   Grady and Monroe are each paid a weekly salary allowance of $950. The doll shop is located in a state that requires unemployment compensation contributions of employers of one or more individuals. The company is subject to state contributions at a rate of 3.1% for wages not in excess of $8,100. Compute each of the following amounts based upon the 41st weekly payroll period for the week ending October 11. Round your intermediate calculations and final answers to the nearest cent. Use rounded answers in subsequent computations. If an amount is zero, enter "0". a.  Amount of FICA taxes…

Part of the Fry’s Electronics, Inc. ’s experience involves providing technical support to its customers. This includes in-home installations of electronics and also computer support at their retail store locations. Requirements Suppose Fry’s Electronics, Inc. provides $10,500 of computer support at the Dallas-Fort Worth store during the month of November. How would Fry's Electronics record this transaction? Assume all customers paid in cash. What financial statement(s) would this transaction affect? Assume Fry’s Electronics, Inc.’s Modesto, California, location received $24,000 for an annual contract to provide computer support to the local city government. How would Fry’s Electronics record this transaction? What financial statement(s) would this transaction affect? What is the difference in how revenue is recorded in requirements 1 and 2? Clearly state when revenue is recorded in each requirement.