Chapter5 - (5-10 min.) S 5-5MEMORANDUMDATE:TO:Zach...

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Unformatted text preview: (5-10 min.) S 5-5MEMORANDUMDATE:TO:Zach PetersFROM:Student NameRE:Essential element of internal control over collection from customersSeparation of dutiesis the essential element in a system to ensure that cash received by mail from customers is properly handled and accounted for. It is very important to separate cash-handling duties from accounting duties. Otherwise, an employee can steal a cash receipt from a customer and cover the theft by writing off the customer account as uncollectible.Student responses may vary.(10-15 min.) E 5-18A1.This is a trading investmentbecause Northern Corporationintends to sell the stock within a short time.2.Dec. 15Short-Term Investment (800 $54)..43,200Cash.43,200Purchased investment.Dec. 31Short-Term Investment [(800 $66) $43,200]..9,600Unrealized Gain on Investment9,600Adjusted investment to market value.3.BALANCE SHEETCurrent assets:Short-term investment, at market value$52,800INCOME STATEMENTOther revenue and gains:Unrealized gain on investment$ 9,600(15 min.) E 5-22AReq. 1JournalDATEACCOUNT TITLES AND EXPLANATIONDEBITCREDITOct.Accounts Receivable...161,000Sales Revenue161,000Oct.Cash.. 137,000Accounts Receivable137,000Oct.Allowance for Uncollectible Accounts2,300Accounts Receivable2,300Oct.Uncollectible-Account Expense($161,000 .04)..6,440Allowance for Uncollectible Accounts6,440Req. 2Accounts ReceivableAllowance forUncollectible Accounts30,000137,0002,000161,0002,3002,3006,440Bal51,7006,140Net accounts receivable = $45,560 ($51,700 $6,140)Hilly Mountain Party Planners expects to collect the net receivable amount.Req. 3Req....
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This note was uploaded on 09/16/2011 for the course ACG 2021 taught by Professor Hornik during the Spring '08 term at University of Central Florida.

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Chapter5 - (5-10 min.) S 5-5MEMORANDUMDATE:TO:Zach...

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