Crystal Bay Hospital's central supply tracks sterile items using a batch code system. When opening count shows 240 items, used items logged as 185, damaged items recorded as 15, but closing count reveals 25 items, what is the unaccounted variance?
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- Analytics in Action Assignment Background: You are an accountant at a large hospital, reporting to the controller. The hospital maintains a perpetual inventory system. Hospital policy requires that a physical count of inventory be performed at year-end. and that the Inventory account balance must be adjusted to match the physical count results. Following the results of the year end physical inventory count, the controller has provided an Excel file containing the physical inventory count results and asked you to use the data contained in this file to prepare three manual journal entries adjusting the Inventory account balance: 1) Remove consignments tracked in the perpetual system from the Inventory balance. 2) Use the Inventory Over/Short account to adjust the Inventory balance to match the count results. 3) Use the Loss Due to Decline in Value account to adjust the Inventory balance for known spoilage. At last tally, the hospital's supply room held 2,146 unique items. Upon ordering…Analytics in Action Assignment Background: You are an accountant at a large hospital, reporting to the controller. The hospital maintains a perpetual inventory system. Hospital policy requires that a physical count of inventory be performed at year-end and that the Inventory account balance must be adjusted to match the physical count results. Following the results of the year end physical inventory count, the controller has provided an Excel file containing the physical inventory count results and asked you to use the data contained in this file to prepare three manual journal entries adjusting the Inventory account balance: 1) Remove consignments tracked in the perpetual system from the Inventory balance. 2) Use the Inventory Over/Short account to adjust the Inventory balance to match the count results. 3) Use the Loss Due to Decline in Value account to adjust the Inventory balance for known spoilage. At last tally, the hospital's supply room held 2,146 unique items. Upon ordering…The following are nine situations, each containing two meansof accumulating evidence:1. Confirm receivables with consumers versus confirming accounts receivable withbusiness organizations.2. Physically examine 3-inch steel plates versus examining electronic parts.3. Examine duplicate sales invoices when several competent people are checking eachother’s work versus examining documents prepared by a competent person on aone-person staff.4. Physically examine inventory of parts for the number of units on hand versusexamining them for the likelihood of inventory being obsolete.5. Discuss the likelihood and amount of loss in a lawsuit against the client with client’sin-house legal counsel versus discussion with the CPA firm’s own legal counsel.6. Confirm the oil and gas reserves with a geologist specializing in oil and gas versusconfirming a bank balance.7. Confirm a bank balance versus examining the client’s bank statements.8. Physically count the client’s inventory held by an independent…
- SOPP of XYZ LimitedThe sales department receives the unstandardised sales order since customer orders are mailed, e-mailed or faxed to the sales department. The sales clerk first converts the unstandardised sales order into the standardised sales order. For this purpose, the sales representative requests the missing information, if any. When the order is received, the sales clerk checks the customer’s creditworthiness of the customer from his computer terminal. Three years ago, the sales clerk requested the accounting department to provide him with a list of customers whose account receivables are written off. The sales clerk is still using this information to check the creditworthiness of the customers. The sales clerk is using the same procedure to check the creditworthiness of the new customers.The customer’s order is rejected if the customer’s credit is not verified. The sales order processing is started after the credit verification. In particular, the sales clerk records the…SOPP of XYZ LimitedThe sales department receives the unstandardised sales order since customer orders are mailed, e-mailed or faxed to the sales department. The sales clerk first converts the unstandardised sales order into the standardised sales order. For this purpose, the sales representative requests the missing information, if any. When the order is received, the sales clerk checks the customer’s creditworthiness of the customer from his computer terminal. Three years ago, the sales clerk requested the accounting department to provide him with a list of customers whose account receivables are written off. The sales clerk is still using this information to check the creditworthiness of the customers. The sales clerk is using the same procedure to check the creditworthiness of the new customers.The customer’s order is rejected if the customer’s credit is not verified. The sales order processing is started after the credit verification. In particular, the sales clerk records the…When aninventory itemfalls to the recorder point, a purchase requisition is automatically generated and printed on the terminal in the purchasing department. The purchasing clerk select suppliers and prepare a purchase order. One copy of the purchase order is sent to the supplier and another copy is sent to the receiving department. The purchasing clerk then adds a record to the open/closed purchase order file through an update program in the data processing department.When the receiving clerk receivesthe delivery from the supplier, the clerkreconciles the items with the packing slip and the purchasing order. After the reconciliation, the receiving clerk prepares a hard-copy receiving report recording the quantity and quality of the goods received. One copy of the receiving report accompaniesthe items to the warehouse and another copy is filed in the receiving department. Using the department terminal, the receiving clerk adds a record to the digital receiving report file. The system…
- American Labs American Labs provides lab testing services for a variety of clients, mostly doctors’ offices and other small medical businesses throughout the Midwest. Clients send test vials containing blood samples or other test requests to American Labs’ testing center, where the requested tests are performed, after which the results are sent back to the client via fax. Jim Larsen, the head technician in the testing facility at American Labs, has approached you for help with the company’s outdated inventory tracking system. Business has picked up recently, and the turnaround for clients’ requested tests has been lengthening. To make matters worse, the lab technicians are seldom able to give customers an answer regarding where their requests fall in the testing queue or how long they can expect the turnaround to be. Much of this stems from an old, mostly paper-based inventory tracking system, which includes handwritten labels put on each of the incoming test vials and a logbook with…dA clerk in the accounting department periodically reviews the inventory records in Dorder to determine which items need reordering. When she notes that the quantity on hand has fallen below a pre-established reorder point, she prepares a prenumbered purchase requisition in two copies. One copy f the PR is placed in a chronological file until the matching purchase order is received. The original PR is sent to the purchasing department, where a buyer (1) decides on a suitable supplier by reference to a supplier list and (2) prepares a prenumbered purchase order in four copies. The original copy of the purchase order is signed by the purchasing manager and mailed to the designated supplier. The second copy of the PO is returned to the inventory clerk in the accounting department, who (a) pulls the matching second copy of the PR from the temporary file (where it had been filed chronologically), (b) posts the ordered quantities to the inventory records, and (c) files the purchase…The purchasing agent receives an inventory status report on his computer terminal from the inventory control application, which identifies the items that need to be reordered. The agent selects the suppliers and enters this information into the computer terminal to create a digital purchase order. He then prints and sends a copy of the PO to the supplier. When the goods are received directly into the warehouse, the warehouse manager counts and inspects them. The manager then creates a digital receiving report and updates the inventory subsidiary ledger from the warehouse terminal. A few days later, the supplier sends an invoice to the AP clerk who reconciles it with the digital copy of the receiving report. From her computer terminal, the clerk records the purchase in the purchases journal and records the liability by adding a record to the AP subsidiary ledger and assigning a due date. Each day, the cash disbursement clerk visually searches the AP subsidiary ledger from her terminal…
- The following are audit procedures in the sales and collectioncycle:1. Add the columns on the aged trial balance and compare the total with the generalledger.2. Examine a sample of shipping documents to determine whether each has a salesinvoice number included on it.3. Examine a sample of customer orders and see if each has a credit authorization.4. Compare the date on a sample of shipping documents a few days before and afterthe balance sheet date with related sales journal transactions.5. Discuss with the sales manager whether any sales allowances have been grantedafter the balance sheet date that may apply to the current period.6. Observe whether the controller makes an independent comparison of the total inthe general ledger with the trial balance of accounts receivable.7. Compare the date on a sample of shipping documents throughout the year withrelated duplicate sales invoices and the accounts receivable master file.8. Compute the ratio of allowance for uncollectible accounts…The sales department receives the unstandardised sales order since customer orders are mailed, e-mailed or faxed to the sales department. The sales clerk first converts the unstandardised sales order into the standardised sales order. For this purpose, the sales representative requests the missing information, if any. When the order is received, the sales clerk checks the customer’s creditworthiness of the customer from his computer terminal. Three years ago, the sales clerk requested the accounting department to provide him with a list of customers whose account receivables are written off. The sales clerk is still using this information to check the creditworthiness of the customers. The sales clerk is using the same procedure to check the creditworthiness of the new customers.The customer’s order is rejected if the customer’s credit is not verified. The sales order processing is started after the credit verification. In particular, the sales clerk records the approved standardised…The sales department receives the unstandardised sales order since customer orders are mailed, e-mailed or faxed to the sales department. The sales clerk first converts the unstandardised sales order into the standardised sales order. For this purpose, the sales representative requests the missing information, if any. When the order is received, the sales clerk checks the customer’s creditworthiness of the customer from his computer terminal. Three years ago, the sales clerk requested the accounting department to provide him with a list of customers whose account receivables are written off. The sales clerk is still using this information to check the creditworthiness of the customers. The sales clerk is using the same procedure to check the creditworthiness of the new customers.The customer’s order is rejected if the customer’s credit is not verified. The sales order processing is started after the credit verification. In particular, the sales clerk records the approved standardised…