558
Problem 8-5A (Concluded)
Part 3
There are several possible reasons why some prenumbered checks are
missing from the sequence of canceled checks returned with a bank
statement. Reasons include:
(1) Some of the checks in the numbered sequence may have cleared the
(2) Some of the checks in the numbered sequence may remain
(3) The issuer of the checks may have voided one or more of the checks
(4) Occasionally, a check will reach the bank but the bank will incorrectly
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 8
PROBLEM SET B
Problem 8-1B (20 minutes)
1. Violates both applying technological control and effective segregation
of duties. It is safe to assume that Latisha Tally has knowledge of
employee passwords since she implemented the system of password
2. Violates applying technological controls. The theater’s system needs to
3. Violates segregation of duties. The company needs to have three
4. Violates applying technological controls. The use of the check
5. Violates segregation of duties. It is good internal control to separate
duties for cash receipts and cash disbursements. Moreover, an
560
Problem 8-2B (20 minutes)
Part 1
Jan. 3
Petty Cash …………………………………………………………..
150.00
Cash ………………………………………………………………
150.00
Jan. 14
Office Supplies Expense ………………………………………
14.29
Merchandise Inventory* ……………………………………….
19.60
Repairs Expense—Computer ……………………………….
38.57
Miscellaneous Expenses ……………………………………..
12.82
Cash Over and Short ……………………………………………
Cash ………………………………………………………………
87.72
Jan. 15
Petty Cash …………………………………………………………..
50.00
Cash ………………………………………………………………
50.00
Jan. 31
Advertising Expense ……………………………………………
50.00
Postage Expenses ……………………………………………….
48.19
Delivery Expense …………………………………………………
78.00
Cash Over and Short ……………………………………………
Cash ………………………………………………………………
182.65
Jan. 31
Petty Cash …………………………………………………………..
50.00
Cash ………………………………………………………………
50.00
Part 2
561
Problem 8-3B (30 minutes)
Part 1
Petty Cash ……………………………………………………….
Part 2
Blues Music Center
Petty Cash Payments Report (for March)
Delivery expense
Part 3
a. Mar. 31
Delivery Expense ………………………………………………….
10.75
Mileage Expense ………………………………………………….
56.80
Postage Expense ………………………………………………….
18.00
Merchandise Inventory …………………………………………
57.60
46.32
Petty Cash ……………………………………………………….
50.00
562
Problem 8-4B (30 minutes)
Part 1
SEVERINO CO.
Bank Reconciliation
December 31, 2017
Part 2
Part 3
In a banking context, a debit memo is notification from the bank that it has
563
Problem 8-5B (50 minutes)
Part 1
SHAMARA SYSTEMS
Bank Reconciliation
May 31, 2017
Part 2
May 31
Cash ……………………………………………………………………
7,350.00
564
Problem 8-5B (Concluded)
Part 3
There are several possible reasons why some prenumbered checks are
missing from the sequence of canceled checks returned with a bank
statement. Reasons include:
(1) Some of the checks in the numbered sequence may have cleared the
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 8
565
SERIAL PROBLEM — SP 8
Serial Problem — SP 8, Business Solutions (50 minutes)
Part 1
BUSINESS SOLUTIONS
Bank Reconciliation
March 31, 2018
Part 2
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 8
566
Reporting in Action — BTN 8-1
1.
$ millions
Balance
September
26, 2015
Cash and
equivalents
as % of:
Balance
September
27, 2014
Cash and
equivalent
s as % of:
2. Per the statement of cash flows for year ended September 26, 2015
($ millions):
Cash and cash
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 8
Reporting in Action (Concluded)
3. Days’ Sales Uncollected ($ thousands)
Days’ sales uncollected = x 365
Accounts receivable
Net sales
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 8
568
Comparative Analysis — BTN 8-2
Days’ sales uncollected = x 365
Apple ($ millions)
Google ($ millions)
Accounts receivable
Net sales
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 8
569
Ethics Challenge — BTN 8-3
1. In a small business office it is very important that the owner of the
3. Despite the collusion, the scheme is not foolproof. For example, some
ways in which the scheme might be uncovered or prevented include the
following:
• A bank employee may become suspicious and call Dr. Conrad and
4. Dr. Conrad should review her salary schedules for employees to make
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 8
570
Communicating in Practice — BTN 8-4B
Memorandum
To: “Owner”
From: “Consultant”
Date: __________
Subject: Advice on monitoring purchase discounts
[Instructor’s Note: The response should acknowledge the owner’s concern and
recommend the net method of recording purchases. It should explain how this method
results in the recording of “Discounts Lost,” which will flow through to the income
statement, thus providing the information desired. The memo might look something like
the following.]
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 8
571
Taking It to the Net — BTN 8-5
[Instructor Note: These answers were taken from the ACFE’s 2016 Report to the Nations.]
s3–us-west-2.amazonaws.com/acfepublic/2016-report-to–the-nations.pdf
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 8
572
Teamwork in Action — BTN 8-6
Common internal controls visible in a typical retail store include:
1. Door locks and roll–down screens for after-hours lock-up.
2. Electronic detection devices stationed at entrances or anti-theft
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 8
573
Entrepreneurial Decision — BTN 8-7
1. Seven principles of internal control along with examples are:
a. Establish responsibilities. The clerks at the counter should be
responsible for handling cash. The other employees should be
d. Separate recordkeeping from custody of assets. The employee
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 8
Hitting the Road — BTN 8-8
No formal solution exists for this activity. It is usually interesting for the
class to exchange their discoveries via class discussion. This is
particularly the case with respect to popular college service/product
centers. Common controls found in college units include:
Global Decision — BTN 8-9
1.
(KRW millions)
Current
year
balance
Cash as
percent
of:
Prior
year
balance
Cash as
percent
of:
Wild, Shaw, Chiappetta, FAP 23e Solutions Manual: Chapter 8
Global Decision (Concluded)
3. Days’ Sales Uncollected Formula (KRW millions)
Days’ sales uncollected = x 365
Accounts receivable
Net sales