Match each situation with the fraud triangle factor – Hire Academic Expert

Problem-1

Match each situation with the fraud triangle factor (opportunity, financial pressure, or rationalization) that best describes it.

  • An employee’s monthly credit card payments are nearly 75% of their monthly earnings.
  • An employee earns minimum wage at a firm that has reported record earnings for each of the last five years.
  • An employee has an expensive gambling habit.
  • An employee has check-writing and -signing responsibilities for a small company, and is also responsible for reconciling the bank account.

Problem-2

The internal control procedures in Dayton Company result in the following provisions. Identify the principles of internal control that are being followed in each case.

  • Employees who have physical custody of assets do not have access to the accounting records. select a principle of internal control
  • Each month, the assets on hand are compared to the accounting records by an internal auditor. select a principle of internal control
  • A prenumbered shipping document is prepared for each shipment of goods to customers.

 

Problem-3

Jolson Company has the following internal control procedures over cash receipts. Identify the internal control principle that is applicable to each procedure.

  • All over-the-counter receipts are entered in cash registers.
  • All cashiers are bonded.
  • Daily cash counts are made by cashier department supervisors.
  • The duties of receiving cash, recording cash, and having custody of cash are assigned to different individuals.
  • Only cashiers may operate cash registers.

Problem-4

While examining cash receipts information, the accounting department determined the following information: opening cash balance $201, cash on hand $1,508.49, and cash sales per register tape $1,324.75.

Prepare the required journal entry based upon the cash count sheet.

Problem-5

Tott Company has the following internal control procedures over cash disbursements. Identify the internal control principle that is applicable to each procedure.

  • Company checks are prenumbered.
  • The bank statement is reconciled monthly by an internal auditor.
  • Blank checks are stored in a safe in the treasurer’s office.
  • Only the treasurer or assistant treasurer may sign checks.
  • Check-signers are not allowed to record cash disbursement transactions.

Problem-6

The following reconciling items are applicable to the bank reconciliation for Forde Co. Indicate how each item should be shown on a bank reconciliation.

  • Outstanding checks.
  • Bank debit memorandum for service charge.
  • Bank credit memorandum for collecting an electronic funds transfer.
  • Deposit in transit.

Problem-7

At July 31, Cullumber Company has this bank information: cash balance per bank $7,310, outstanding checks $715, deposits in transit $1,305 and a bank service charge $20. Determine the adjusted cash balance per bank at July 31.

The adjusted cash balance per bank at July 31

Problem-8

In the month of November, Sandhill Co. Inc. wrote checks in the amount of $9,195. In December, checks in the amount of $11,625 were written. In November, $8,395 of these checks were presented to the bank for payment, and $10,585 in December.

What is the amount of outstanding checks at the end of November? At the end of December?

Problem-9

The following information is available for Wildhorse Co. for the month of January: expected cash receipts $59,240; expected cash disbursements $66,900; and cash balance on January 1, $11,700. Management wishes to maintain a minimum cash balance of $8,160.

Prepare a basic cash budget for the month of January.

Problem-10

The following information pertains to Sunland Company.

  1. Cash balance per bank, July 31, $7,688.
  2. July bank service charge not recorded by the depositor $47.
  3. Cash balance per books, July 31, $7,724.
  4. Deposits in transit, July 31, $3,060.
  5. $2,376 collected for Sunland Company in July by the bank through electronic funds transfer. The collection has not been recorded by Sunland Company.
  6. Outstanding checks, July 31, $695.

(a) Prepare bank reconciliation at July 31, 2017.

(b) Journalize the adjusting entries at July 31 on the books of Sunland Company.

Problem-11

  1. Cash balance per bank, July 31, $8,438.
  2. July bank service charge not recorded by the depositor $62.
  3. Cash balance per books, July 31, $8,474.
  4. Deposits in transit, July 31, $3,810.
  5. $3,126 collected for Blossom Company in July by the bank through electronic funds transfer. The collection has not been recorded by Blossom Company.
  6. Outstanding checks, July 31, $710.

(a) Prepare bank reconciliation at July 31, 2017.

(b) Journalize the adjusting entries at July 31 on the books of Sunland Company.

Problem-12

This information relates to the Cash account in the ledger of Carla Vista Company.

Balance September 1—$19,180; Cash deposited—$64,000
Balance September 30—$20,380; Checks written—$62,800

The September bank statement shows a balance of $19,280 at September 30 and the following memoranda.

Credits Debits
Collection of electronic funds transfer $2,480 NSF check: H. Kane $1,210
Interest earned on checking account 70 Safety deposit box rent 85

At September 30, deposits in transit were $5,413 and outstanding checks totaled $3,058.

  • Prepare the bank reconciliation at September 30, 2017.
  • Prepare the adjusting entries at September 30, assuming the NSF check was from a customer on account.

Problem-13

This information relates to the Cash account in the ledger of Blossom Company.

Balance September 1—$16,500; Cash deposited—$64,000
Balance September 30—$17,700; Checks written—$62,800

The September bank statement shows a balance of $16,600 at September 30 and the following memoranda.

Credits Debits
Collection of electronic funds transfer $1,930 NSF check: H. Kane $660
Interest earned on checking account 50 Safety deposit box rent 65

At September 30, deposits in transit were $4,843 and outstanding checks totaled $2,488.

  • Prepare the bank reconciliation at September 30, 2017.
  • Prepare the adjusting entries at September 30, assuming the NSF check was from a customer on account.

Problem-14

The cash records of Oriole Company show the following.

For July:

1. The June 30 bank reconciliation indicated that deposits in transit total $790. During July, the general ledger account Cash shows deposits of $17,390, but the bank statement indicates that only $15,920 in deposits were received during the month.
2. The June 30 bank reconciliation also reported outstanding checks of $925. During the month of July, Oriole Company books show that $18,500 of checks were issued, yet the bank statement showed that $16,270 of checks cleared the bank in July.

For September:

3. In September, deposits per bank statement totaled $24,940, deposits per books were $25,540, and deposits in transit at September 30 were $2,730.
4. In September, cash disbursements per books were $23,340, checks clearing the bank were $24,710, and outstanding checks at September 30 were $2,410.

There were no bank debit or credit memoranda, and no errors were made by either the bank or Oriole Company.

Answer the following questions.

  • In situation 1, what were the deposits in transit at July 31? The deposits in transit at July 31 $
  • In situation 2, what were the outstanding checks at July 31? The outstanding checks at July 31 $
  • In situation 3, what were the deposits in transit at August 31? The deposits in transit at August 31 $
  • In situation 4, what were the outstanding checks at August 31? The outstanding checks at August 31

Problem-15

Shamrock, Inc.’s bank statement from Main Street Bank at August 31, 2017, gives the following information.

Balance, August 1 $18,550 Bank debit memorandum:
August deposits 71,150 Safety deposit box fee $ 60
Checks cleared in August 68,643 Service charge 85
Bank credit memorandum: Balance, August 31 20,992
  Interest earned 80

A summary of the Cash account in the ledger for August shows the following: balance, August 1, $18,850; receipts $74,150; disbursements $73,535; and balance, August 31, $19,465. Analysis reveals that the only reconciling items on the July 31 bank reconciliation were a deposit in transit for $4,835 and outstanding checks of $4,535. In addition, you determine that there was an error involving a company check drawn in August: A check for $400 to a creditor on account that cleared the bank in August was journalized and posted for $40.

  • Determine deposits in transit.
  • Determine outstanding checks.
  • Prepare a bank reconciliation at August 31.