Exam 2 - Chapter 7 problems 1. Andy has worked for Dr. Heather Thomas for several years. Andy demonstrates a loyalty that is rare among employees. He hasn't taken a vacation in the last three years....

?



Exam 2 - Chapter 7 problems 1. Andy has worked for Dr. Heather Thomas for several years. Andy demonstrates a loyalty that is rare among employees. He hasn't taken a vacation in the last three years. One of Andy's primary duties at the medical office is to open the mail, list the checks received and post the payment to the customer’s accounts receivable. He also takes cash from patients at the cashier window as patients leave. He puts the cash in the top desk drawer. At times it is so hectic that Andy doesn't bother with giving each patient a receipt for the cash paid on their accounts. When the traffic is slow in the office, Andy offers to help Eve prepare checks for vendor payment. She is always happy to receive his help, because he is a very hard worker. He is very good with numbers and also does the monthly bank reconciliation. Instructions: List six different internal control procedures violated in this medical office situation. List the procedure (review textbook pages 383-385) and explain how that procedure is violated in the situation. [12 points] Procedure:Violation: 1. 2. 3. 4. 5. 6. 2. The cash balance per books for Thomas Company on October 31, 2018 is $8,736.01. The following checks and receipts were recorded in the company books for the month of October, 2018: ChecksReceipts No. Amount No. Amount Amount Date 17$372.9622$ 578.84$843.8610/ 5 18$780.6223$1,687.50$941.5410/21 19$157.0024$ 921.30$808.5810/27 20$587.5025$ 246.03$967.0010/30 21$234.15 In addition, the bank statement for the month of October is presented below: Balance Deposits and CreditsChecks and Debits Balance Last StatementNo.Total AmountNo.Total AmountThis Statement ———————————————————————————————————————— $5,404.845$9,178.3610$3,632.19$10,951.01 ———————————————————————————————————————— Checks and other debits: Deposits: No.AmountNo.AmountNo.Amount AmountDate ———————————————————————————————————————— 14148.2917372.96 240.00 NSF5,484.3810/ 1 18708.6224921.30 25.00 SC843.8610/ 8 19157.0025246.03941.5410/23 21234.1522578.84808.5810/29 1,100.00 CM 10/31 ———————————————————————————————————————— Symbols: NSF (Not sufficient funds) SC (Service charge) CM (Credit Memo) ———————————————————————————————————————— Check No. 18 was correctly written for $708.62 for a payment on account. The NSF check was from S. King, a customer, in settlement of an accounts receivable. The credit memo is for the collection of a note receivable, including interest of $60. The September bank reconciliation had a deposit-in-transit for $5,484.38 and an outstanding check, #14 for $148.29. Instructions: [13 points] (a) Prepare a bank reconciliation at October 31. (b) Prepare one of the adjusting journal entries required by the bank reconciliation.