Discuss the potential for abuse and fraud in this system. What are the controls that should be implemented to reduce the risks?
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Gaboner Co. maintains a large fleet of automobiles, trucks, and vans for use by their service and sales force. Supervisors in the various departments maintain the fixed asset records for these vehicles, including routine maintenance, repairs, and mileage information. This information is periodically submitted to the fixed asset department, which uses it to calculate
To assure a reliable fleet, the company disposes of vehicles when they accumulate 80,000 miles of service. Depending on usage, some vehicles reach this point sooner than others. When a vehicle reaches the 80,000 miles, the supervisor is authorized to use it in trade for a new replacement vehicle or to sell it privately. Employees of the company are given the first option to bid on theretired vehicles. Upon disposal of the vehicle, the supervisor submits a disposal report to the fixed asset department, which writes off the asset.
Discuss the potential for abuse and fraud in this system. What are the controls that should be implemented to reduce the risks?
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- Expenditure Cycle Provide what is being asked in the problem. Holder Co. maintains a large fleet of automobiles, trucks, and vans for its service and sales force. Supervisors in the various departments maintain the fixed asset records for these vehicles, including routine maintenance, repairs, and mileage information. This information is periodically submitted to the fixed asset department, which uses it to calculate depreciation on the vehicle. To ensure a reliable fleet, the company disposes of vehicles when they accumulate 80,000 miles of service. Depending on usage, some vehicles reach this point sooner than others. When a vehicle reaches 80,000 miles, the supervisor is authorized to trade it for a new replacement vehicle or to sell it privately. Employees of the company are given the first option to bid on the retired vehicles. Upon disposal of the vehicle, the supervisor submits a disposal report to the fixed asset department, which writes off the asset. Discuss…Holder Co. maintains a large fleet of automobiles, trucks, and vans for their service and sales force. Supervisors in the various departments maintain the fixed asset records for these vehicles, including routine maintenance, repairs, and mileage information. This information is periodically submitted to the fixed asset department, which uses it to calculate depreciation on the vehicle. To ensure a reliable fleet, the company disposes of vehicles when they accumulate 80,000 miles of service. Depending on usage, some vehicles reach this point sooner than others. When a vehicle reaches 80,000 miles, the supervisor is authorized to use it in trade for a new replacement vehicle or to sell it privately. Employees of the company are given the first option to bid on the retired vehicles. Upon disposal of the vehicle, the supervisor submits a disposal report to the fixed asset department, which writes off the asset. Required Discuss the potential for abuse and fraud in this system. Describe…Holder Co. maintains a large fleet of automobiles, trucks, and vans for their service and sales force. Supervisors in the various departments maintain the fixed asset records for these vehicles, including routine maintenance, repairs, and mileage information. This information is periodically submitted to the fixed asset department, which uses it to calculate depreciation on the vehicle. To ensure a reliable fleet, the company disposes of vehicles when they accumulate 80,000 miles of service. Depending on usage, some vehicles reach this point sooner than others. When a vehicle reaches 80,000 miles, the supervisor is authorized to use it in trade for a new replacement vehicle or to sell it privately. Employees of the company are given the first option to bid on the retired vehicles. Upon disposal of the vehicle, the supervisor submits a disposal report to the fixed asset department, which writes off the asset. Discuss the potential for abuse and fraud in this system. Describe the…
- CH Kilo Inc. is evaluating a proposal to supply warehouse space to a potential customer as well as maintain all the required warehouse records. Kilo has a storage barn not currently in use; however, it will require the installation of additional shelving and a special concrete pad for delivery truck access Kilo's existing accountant will assume the additional accounting duties and receive an additional $8,000 per annum. The potential customer will pay a fee to Kilo based on the volume of product stored. Required: Which of the following items is not a relevant consideration in deciding whether Kilo should provide the warehouse space to the potential customer? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer, Any boxes left with a question mark will be automatically graded as incorrect.) Original purchase price of the storegeben…M Starn Tool & Manufacturing Company, located in Meadville, PA, provides component machining for robotics, drones, vision systems, and special machines and assemblies for the aerospace, military, commercial, automotive, and medical Industries. Assume the company has five different intangible assets to be accounted for and reported on the financial statements. The management is concerned about the amortization of the cost of each of these intangibles. Facts about each Intangible follow. a. Patent. The company purchased a patent for a new tool at a cash cost of $71,500 on January 1, 2023. The patent has an estimated useful life of 13 years. b. Copyright. On January 1, 2023, the company purchased a copyright for $28,500 cash. It is estimated that the copyrighted Item will have no value by the end of 10 years. c. Franchise. The company obtained a franchise from H & H Tool Company to make and distribute a special item for the automotive Industry. It obtained the franchise on January 1,…Manny Company uses many kinds of machines in its operations. The following information relates to a machine that was acquired at the beginning of the current year: Cash paid for machine, including VAT of P96,000 Cost of transporting machine Labor cost of installation by expert fitter Labor cost of testing machine Insurance cost for the current year Cost of training for personnel who will use the machine Cost of safety rails and platform surrounding machine Cost of water device to keep machine cool Cost of adjustment to machine to make it operate more efficiently Estimated dismantling cost to be incurred as required by contract 896,000 30,000 50,000 40,000 15,000 25,000 60,000 80,000 75,000 65,000 What total amount should be capitalized as cost of the machine?
- Hulme Company operates a small manufacturing facility as a supplement to its regular service activities. At the beginning of the current year, an asset account for the company showed the following balances: Manufacturing equipment Accumulated depreciation through the end of last year During the current year, the following expenditures were incurred for the equipment: Major overhaul of the equipment on January 2 the current year that improved efficiency $ 6,000 Routine repairs on the equipment 1,000 The equipment is being depreciated on a straight-line basis over an estimated life of 17 years with a $11,000 estimated residual value. The annual accounting period ends on December 31. $ 135, 100 57,000 Required: Indicate the effects of the following on the accounting equation. Note: Enter decreases to account categories as negative amounts and do not round your intermediate calculations. 1. The adjustment for depreciation at the end of last year. 2. The two expenditures during the current…Boyne University offers an extensive continuing education program in many cities throughout the state.For the convenience of its faculty and administrative staff and to save costs, the university operates amotor pool. The motor pool operated with 20 vehicles until February, when an additional automobile wasacquired at the request of the university administration. The motor pool furnishes gasoline, oil, and othersupplies for its automobiles. A mechanic does routine maintenance and minor repairs. Major repairs areperformed at a nearby commercial garage. Each year, the supervisor of the motor pool prepares an annualbudget, which is reviewed by the university and approved after suitable modifications.The following cost control report shows actual operating costs for March of the current year comparedto one-twelfth of the annual budget.Boyne University Motor PoolCost Control ReportFor the Month Ended March 31Monthly Budget (Over)Annual (1/12 of Annual March UnderBudget Budget) Actual…Oaktree Company purchased new equipment and made the following expenditures: Purchase price Sales tax Freight charges for shipment of equipment Insurance on the equipment for the first year Installation of equipment The equipment, including sales tax, was purchased on open account with payment due in 30 days. The other expenditures listed above were paid in cash. Required: Prepare the necessary journal entries to record the above expenditures (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet < 1 $50,000 2,700 750 958 1,500 2 Record the purchase of equipment.
- Oaktree Company purchased new equipment and made the following expenditures: Purchase price Sales tax Freight charges for shipment of equipment Insurance on the equipment for the first year Installation of equipment The equipment, including sales tax, was purchased on open account, with payment due in 30 days. The other expenditures listed above were paid in cash. Required: Prepare the necessary journal entries to record the above expenditures. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheetIngot Land Company owns four trucks dedicated primarily to its landfill business. The company's accounting record indicates the following: Determine the amount of depreciation for each truck during the year.Starn Tool & Manufacturing Company, located in Meadville, PA, provides component machining for robotics, drones, vision systems, and special machines and assemblies for the aerospace, military, commercial, automotive, and medical industries. Assume the company has five different intangible assets to be accounted for and reported on the financial statements. The management is concerned about the amortization of the cost of each of these intangibles. Facts about each intangible follow: a. Patent. The company purchased a patent for a new tool at a cash cost of $78,000 on January 1, 2020. The patent has an estimated useful life of 13 years. b. Copyright. On January 1, 2020, the company purchased a copyright for $31,000 cash. It is estimated that the copyrighted item will have no value by the end of 10 years. c. Franchise. The company obtained a franchise from H & H Tool Company to make and distribute a special item for the automotive industry. It obtained the franchise on…
