A company has an external sales agency. The company allows the sales agency to incur and pay for all its expenses and approved asset purchases. The company has never transferred any tangible assets to the agency and created the agency by simply establishing an agency working capital fund of P40,000. Whenever the sales agency needs more working capital it transmits the receipts for what it has spent back to the main office which then sends cash back to the agency to cover the remitted items. Small amounts of merchandise inventory are sent to the agency for display and demonstration purposes. These items are transferred at cost. An operation such as the one descried above most closely resembles a

A company has an external sales agency. The company allows the sales agency to incur and pay for all its expenses and approved asset purchases. The company has never transferred any tangible assets to the agency and created the agency by simply establishing an agency working capital fund of P40,000. Whenever the sales agency needs more working capital it transmits the receipts for what it has spent back to the main office which then sends cash back to the agency to cover the remitted items. Small amounts of merchandise inventory are sent to the agency for display and demonstration purposes. These items are transferred at cost. An operation such as the one descried above most closely resembles a

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter6: Process Costing

Section: Chapter Questions

Problem 35P: Hepworth Credit Corporation is a wholly owned subsidiary of a large manufacturer of computers....

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A company has an external sales agency. The company allows the sales agency to incur and pay for all its expenses and approved asset purchases. The company has never transferred any tangible assets to the agency and created the agency by simply establishing an agency working capital fund of P40,000. Whenever the sales agency needs more working capital it transmits the receipts for what it has spent back to the main office which then sends cash back to the agency to cover the remitted items. Small amounts of merchandise inventory are sent to the agency for display and demonstration purposes. These items are transferred at cost. An operation such as the one descried above most closely resembles a(n): A. Accounts payable subsidiary ledgerB. Accounts receivable subsidiary ledgerC. Petty Cash systemD. Voucher system
Suppose that you have been given a summer job as an intern at Issac Aircams, a company that manufactures sophisticated spy cameras for remote-controlled military reconnaissance aircraft. The company, which is privately owned, has approached a bank for a loan to help finance itsgrowth. The bank requires financial statements before approving the loan.Required:Classify each cost listed below as either a product cost or a period cost for the purpose of preparing financial statements for the bank.1. Depreciation on salespersons’ cars.2. Rent on equipment used in the factory.3. Lubricants used for machine maintenance.4. Salaries of personnel who work in the finished goods warehouse.5. Soap and paper towels used by factory workers at the end of a shift.6. Factory supervisors’ salaries.7. Heat, water, and power consumed in the factory.8. Materials used for boxing products for shipment overseas. (Units are not normally boxed.)9. Advertising costs.10. Workers’ compensation insurance for factory…
E5-4 Identifying Internal Control Principles in Cash Payment ProcessesHome Repair Corp. (HRC) operates a building maintenance and repair business. The business hasthree office employees—a sales manager, a materials/crew manager, and an accountant. HRC’scash payments system is described below.a. After a contract is signed with a customer, the sales manager prepares a prenumberedpurchase requisition form that indicates the materials needed for the work at the repair site. b. Based on the purchase requisition form, the materials/crew manager prepares and sends aprenumbered purchase order to suppliers of materials, advising them of the specific materialsneeded and the repair site to which they should be delivered.c. The materials/crew manager is the only employee authorized to order goods.d. Upon receiving a supplier’s invoice, the accountant compares it to terms indicated on thepurchase order, noting in particular the prices charged and quantities ordered.e. If these documents are in…
ABC Company established a petty cash fund for small expenses of the offices of the main building which amounts to P25,000. To track the fund usage, the cash custodian uses petty cash vouchers (PCV) and places the fund inside a cash box. Employees’ vale and check accommodation (with P1,000 maximum) are allowed disbursements out of the fund. If the fund depletes to P2,000, the custodian is authorized to replenish the fund by preparing a summary of disbursements. At the end of the first month, the internal auditor conducted a surprise cash count with the presence of the petty cash custodian. The auditor found the following items inside the petty cash box: Coins – 45.00; Bills – 2,800; PCV with expense receipts totaled 5,800; employee’s check amounting to 1,000; separated bills amounting P2,500 stapled together with a note which indicates “for department’s summer outing”; employee’s IOUs/ vale sheets totaling 225; a note from Kaging Store worded ‘deposit’ P30 for 3 liters of soft drinks.…
2. Agency XYZ established a petty cash fund for P5,000. During the year, out of the petty cash fund, the following were purchased: office supplies worth P500 , Postage Stamps P500, Traveling expense P500. It is the agency practice replenish petty cash fund every end of the period. The following utilities expense were incurred for the period: water expense P5,000, Electricity Expense P8,000 The director also noticed that the curtains of the agency offices were already frayed so new curtains were bought for P8,700 and a new tables and chairs amounting to 14,999. How much is the total MOOE at the end of the period?
I have been unsuccesful in multiple attempts and hope you can assist on the following question. Using the direct method compute for Flamingo Corporation: Cash payments for rent Cash payments for salaries Cash receipts from customers I have attached my spreasdsheet with the inputs and two of my attempts.
Pharoah Ltd. designated Alexa Kidd as petty cash custodian and established a petty cash fund of $410. The fund was reimbursed when the cash in the fund was at $65. Petty cash receipts show that funds were disbursed for $160 of supplies and $183 of freight charges on inventory purchases. Prepare the entries needed to record the following independent transactions. (a) Assume that Pharoah decides to increase the size of the petty cash fund to $610 immediately after the reimbursement. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Account Titles and Explanation Debit Credit
"We have a contract with our partner bank that they pay us a monthly rebate that is calculated as a portion of the total interchange revenue they receive for each transaction that is run through our platform. As part of our contract/application with our customers we offer cash back rewards that is calculated as a percentage of the revenue that we receive from the bank for each of their transactions."Q: What guidance supports that decision?
Snake Creek Company has a trusted employee who, as the owner said, “handles all of the bookkeeping and paperwork for the company.” This employee is responsible for counting, verifying, and recording cash receipts and payments, making the weekly bank deposit, preparing cheques for major expenditures (signed by the owner), making small expenditures from the cash register for daily expenses, and collecting accounts receivable. The owner asked the local bank for a $20,000 loan. The bank asked that an audit be performed covering the year just ended. The independent auditor (a local CPA), in a private conference with the owner, presented some evidence of the following activities of the trusted employee during the past year: Cash sales sometimes were not entered in the cash register and the trusted employee pocketed approximately $50 per month. Cash taken from the cash register (and pocketed by the trusted employee) was replaced with expense memos with fictitious signatures (approximately…
"We have a contract with our partner bank that they pay us a monthly rebate that is calculated as a portion of the total interchange revenue they receive for each transaction that is run through our platform. As part of our contract/application with our customers we offer cash back rewards that is calculated as a percentage of the revenue that we receive from the bank for each of their transactions."Q: How should the cash back rewards payment to customers be represented on our income statement?
ACC Snake Creek Company has one trusted employee who, as the owner said, handles all of the book-keeping and paperwork for the company. This employee is responsible for counting, verifying, and recording cash receipts and payments, making the weekly bank deposit, preparing checks for major expenditures (signed by the owner), making small expenditures from the cash register for daily expenses, and collecting accounts receivable. The owners asked the local bank for a $ 20,000 loan. The bank asked that an audit be performed covering the year just ended. The independent auditor ( a local CPA), in a private conference with the owner, presented some evidence of the following activities of the trusted employee during the past year: a. Cash sales sometimes were not entered in the cash register, and the trusted employee pocketed approximately $ 50 per month. b. Cash taken from the cash register (and pocketed by the trusted employee) was replaced with expense memos with fictitious…
The Head of the Agency approves the establishment of a P30,000 petty cash fund. Here are the following information for the monthly petty expenses as well as the cash count: Coins and Currencies 7,800 Office Supplies Expense 3,400 Fuel and Oil 10,500 Postage and Courier Expenses 1,900 Maintenance and Operating Expenses 4,000 a. Give the journal entries pertaining to the establishment of the PCF. b. Give the journal entries when the PCF is replenished. c. The journal entries if the PCF is not replenished. d. The journal entries if the PCF is closed. e. How much is the cash shortage(overage)? f. How is the shortage or overage accounted? g. The journal entries for the cash shortage(overage).