Financial Accounting – Week 5 Assignment Wk 5 Problems In the Cases & Projects section at the back of Chapter 8 in your textbook, find and complete the following problems: · CP 8-6 Inter

Financial Accounting – Week 5 Assignment Wk 5 Problems In the Cases & Projects section at the back of Chapter 8 in your textbook, find and complete the following problems: · CP 8-6 Inter
CP 8-6. Internal controls The following is an excerpt from a conversation between two salesclerks, Jean Moen and Sara Cheney. Jean and Sara are employed by Turpin Meadows Electronics, a locally owned and operated electronics retail store. Jean: Did you hear the news? Sara: What news? Jean: Neal and Linda were both arrested this morning. Sara: What? Arrested? You’re putting me on! Jean: No, really! The police arrested them first thing this morning. Put them in handcuffs, read them their rights—the whole works. It was unreal! Sara: What did they do? Jean: Well, apparently they were filling out merchandise refund forms for fictitious customers and then taking the cash. Sara: I guess I never thought of that. How did they catch them? Jean: The store manager noticed that returns were twice that of last year and seemed to be increasing. When he confronted Neal, he became flustered and admitted to taking the cash, apparently more than $9,000 in just three months. They’re going over the transactions of the last six months to try to determine how much Linda stole. She apparently started stealing first. CP 8-8. Bank reconciliation and internal control The records of Parker Company indicate a July 31 cash balance of $10,400, which includes undeposited receipts for July 30 and 31. The cash balance on the bank statement as of July 31 is $10,575. This balance includes a note of $2,250 plus $150 interest collected by the bank but not recorded in the journal. Checks outstanding on July 31 were as follows: No. 2670, $1,050; No. 3679, $675; No. 3690, $1,650; No. 5148, $225; No. 5149, $750; and No. 5151, $800. On July 25, the cashier resigned effective at the end of the month. Before leaving on July 31, the cashier prepared the following bank reconciliation: Cash Balance per books, July 31____________________________ $10,400 Add Outstanding Checks: No. 5148______________________________________________ $225 5149______________________________________________ 750 5151______________________________________________ 800 1,675 12,075 Less Undeposited Receipts____________________________________ 1,500 Cash Balance Per Bank, July 31_________________________________ 10,575 Deduct Unrecorded Note with Interest__________________________ 2,400 True Cash, July 31___________________________________________ 8,175 Calculate tape of outstanding checks 0* 225+ 750+ 800+ 1,675* Subsequently, the owner of Parker Company discovered that the cashier had stolen an unknown amount of undeposited receipts, leaving only $1,500 to be deposited on July 31. The owner, a close family friend, has asked for your help in determining the amount that the former cashier stole. Determine the amount the cashier stole from Parker Company. Show your computations in good form. How did the cashier attempt to conceal the theft? 3 a. Identify two major weaknesses in internal controls that allowed the cashier to steal the undeposited cash receipts. b. Recommend improvements in internal controls so that similar types of thefts of undeposited cash receipts can be prevented. CP 8-9. Cash to monthly cash expenses ratio TearLab Corp. is a health care company that specializes in developing diagnostic devices for eye disease. TearLab reported the following data (in thousands) for three recent years: For Years Ended December 31 Year3____ Year 2___ Year 1 Cash and Cash Equivalents 13,838 16,338 37,778 Net Cash Flows From Operations (23,702) (18,172) (13,234) Determine the monthly cash expenses for Year 3, Year 2, and Year 1. Round to one decimal place. Determine the ratio of cash to monthly cash expenses as of December 31 for Year 3, Year 2, and Year 1. Round to one decimal place. Based on (1) and (2), comment on TearLab’s ratio of cash to monthly operating expenses for Year 3, Year 2, and Year 1.