Q u e s t i on 6 4 2 6 marks during october david

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  • MAA 261
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Question64 + 2 = 6 MarksDuring October, David Imports had sales of $180,000, which included $120,000 ofcredit sales. October collections in cash from customers were $90,000.Other data include:30 September debit balance in Accounts Receivable, $28,00030 September credit balance in Allowance for Impairments, $1,000Actual write offs of bad debts totaled $1,200 for OctoberRequired allowance for impairments, estimated as 2% of accounts receivableat the end of OctoberRequired:a.Prepare properly formatted General Journal entries for David Imports torecord the:i.sales,ii.cash collected from accounts receivablesiii.write-offs of bad debts andiv.the end-of-period adjustment for bad debts expense/allowance usingthe percentage of accounts receivable method, for the month ofOctober.Narrations areNOTrequired.(4 marks)DateAccount titles and explanationDebit $Cr edit $
Page | 27DateAccount titles and explanationDebit $Cr edit $
Page | 28Question 7Printers Delight sells a variety of printers for use with personal computers.Lastmonth, the purchasing officer, Joe Shifty, discovered a weakness in the internalcontrol of the company and, as a result, was able to steal a number of printers.Shifty issued a purchase order for 20 printers to one of Printers Delight’s regularsuppliers.The purchase order included instructions to deliver the printers to 100Shark Street, Shifty’s home address.The supplier shipped the printers to Shark Street and sent a sales invoice toPrinters Delight.When the invoice arrived, an accounting officer carefullycomplied with company policy and compared the invoice to the purchase ordercopy.Being satisfied that the invoice agreed with the quantity, price and modelnumbers of the printers ordered, the officer recorded the transaction in theaccounting records and authorised payment of the invoice.REQUIRED –(a)Identifytheinternal control weakness, discovered by thepurchasing officer,that enabled him to commit this theft?(b)Explainwhatchangesyou would recommend in the company’sinternal documentation and invoice approval procedurestoprevent such thefts occurring in the future?END OF EXAMINATION
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Term
Three
Professor
MAA261
Tags
Balance Sheet, Expense, Generally Accepted Accounting Principles, Goods Sold

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