Accounting Information Systems
11th Edition
ISBN: 9780357156032
Author: Ulric J. Gelinas; Richard B. Dull; Patrick Wheeler
Publisher: Cengage Limited
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Textbook Question
Chapter 10, Problem 15RQ
Describe the impact that entity-level controls (i.e., control environment, pervasive controls, and general/IT general controls) can have on the effectiveness of OE/S business process controls.
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Use the information provided below to prepare the following for May and June 2025:
Debtors Collection Schedule
Cash Budget.
The following information was provided by Lewis Traders:1. An unfavourable bank balance of R40 000 is expected on 30 April 2025. 2. Budgeted credit sales for April to June 2025 are as follows:
April
R420 000
May
R372 000
June
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3. Credit sales are estimated to be 60% of the total sales. The balance of the sales is for cash. Customers who purchase for cash are entitled to a discount of 10%.4. Collections from credit sales are expected to be as follows:• 30% during the month of sale (These debtors receive a 5% discount.)• 70% in the following month.5. Budgeted purchases of inventories from April to June 2025 are as follows:
April
R360 000
May
R320 000
June
R400 000
Prepare the Pro Forma Statement of Financial Position as at 31 December 2025 from the information provided below.
Info:
The budgeted Statement of Financial Position of Candyland Ltd as at 31 December 2024 is as follows:
Candyland Ltd
Statement of Financial Position as at 31 December 2024
R
ASSETS
Non-current assets
2 500 000
Fixed/Tangible assets
2 500 000
Current assets
2 250 000
Inventory
1 500 000
Accounts receivable
625 000
Cash
125 000
Total assets
4 750 000
EQUITY AND LIABILITIES
Equity
3 500 000
Ordinary share capital (150 000 shares)
3 000 000
Retained earnings
500 000
Non-current liabilities
750 000
Long-term loan: Barbie Bank
750 000
Current liabilities
500 000
Accounts payable
500 000
Total equity and liabilities
4 750 000
Candyland Ltd provided the following additional financial data to assist in the preparation of the Pro Forma…
Use the information provided below to answer the following questions. The answers to the ratios must be expressed to two decimal places and be fully stated e.g. 2.15:1; 24.67% etc
Use the appropriate ratio to determine whether Sunday Limited will be able to settle its short-term debts when business conditions are
Is Sunday Limited efficient in the collection of its debts? Motivate your
Will the shareholders of Sunday Limited be satisfied with their return on investment? Motivate your answer with the relevant
Is Sunday Limited taking advantage of the credit terms offered by creditors? Motivate your
Use the relevant ratio to determine the percentage of debt to the assets of the Comment on your answer.
Compare the dividend per share with the earnings per share of Sunday Limited. What conclusions may be drawn from this?
Extracts of the financial statements of Sunday Limited for 2023 are given below.
Sunday Limited
Statement of Comprehensive Income for the year end 31 December 2023…
Chapter 10 Solutions
Accounting Information Systems
Ch. 10 - Prob. 1RQCh. 10 - What are the major functions performed by the OE/S...Ch. 10 - With what internal and external entities does the...Ch. 10 - Prob. 4RQCh. 10 - Prob. 5RQCh. 10 - Prob. 6RQCh. 10 - Distinguish buy-side and sell-side systems.Ch. 10 - Prob. 8RQCh. 10 - Prob. 9RQCh. 10 - Prob. 10RQ
Ch. 10 - Prob. 11RQCh. 10 - Prob. 12RQCh. 10 - Prob. 13RQCh. 10 - Prob. 14RQCh. 10 - Describe the impact that entity-level controls...Ch. 10 - Prob. 1DQCh. 10 - Prob. 2DQCh. 10 - Prob. 3DQCh. 10 - Prob. 4DQCh. 10 - Prob. 5DQCh. 10 - Prob. 6DQCh. 10 - An enterprise system supports a business process...Ch. 10 - Among the three functional entities (marketing,...Ch. 10 - The chapter presented a brief example of how the...Ch. 10 - Prob. 3SPCh. 10 - Prob. 4SPCh. 10 - Prob. 5SPCh. 10 - Prob. 6SPCh. 10 - Prob. 3PCh. 10 - Prob. 6P
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