a.
Introduction: Internal control refer to the rules and procedures made by the company to control the internal activities of the company. The internal control ensures that the financial statements are free from misstatements.
To identify:The control procedure adopted for orders coming over the internet or through calls.
b.
Introduction: Internal control refer to the rules and procedures made by the company to control the internal activities of the company. The internal control ensures that the financial statements are free from misstatements.
To indicate: The control procedure adopted for the orders made through company’s website.
c.
Introduction: Internal control refer to the rules and procedures made by the company to control the internal activities of the company. The internal control ensures that the financial statements are free from misstatements.
To indicate: The potential type of misstatement that could occur because of non-presence or less effectiveness of control procedures.
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Auditing: A Risk Based-Approach (MindTap Course List)
- Living Corner sells home wares and various otherreading-related products. One of the store's most popular products is the fluffy pillow. The pillow each sell for $26.00. Originally the pillows were handmade by a local artisan. The store's owner has been impressed with the demand for the pillow and has recently begun a small manufacturing company to produce and distribute the pillow to other stores. Estimated sales for the fourth quarter (in units) are as follows: October 9 500 November 10 200 December 12 600 Total 32 300 Required: a) Prepare a sales budget for the fourth quarter based on the above information. b) Prepare a production budget for the pillow manufacturing company. The company did not have any inventory at the end of September, but they want to maintain a 20 percent inventory at the end of each month based on the next month's sales. January's sales are expected to be low, given the post-holiday trends and are estimated to be 6800 units. c) Explain the benefits of budgeting…arrow_forwardtealesxille Sanctuary is a family-owned and operated wildlife park located in Melbourne. Healesville Sanctuary has more than 150 animal species, some of which are loaned from overseas animal parks. Healesville Sanctuary has two divisions for selling merchandise: a retail operation that sells food, beverages, shirts, souvenirs and other novelties to visitors within the park, and a wholesale operation that sells toys to department stores. The following management figures are relevant for the year ended 30 June 2020: Total assetS 69 120 000 Total current assets 34 560 000 Inventories 28 800 000 Net assets 51 840 000 Profit after income tax 9 792 000 The company tax rate is 30 per cent. During the conduct of the audit, the following items of interest were noted by the audit team: Due to an electrical contractor accidentally drilling through a power cable, all invoices for items sold through tealesxille sanctuary's wholesale operations on 22 and 23 June had to be manually prepared. Many of…arrow_forwardHeartstrings Gift Shoppe sells an assortment of gifts for any occasion. During October, Heartstrings started a Gift-of-the-Month program. Under the terms of this program, beginning in the month of the sale, Heartstrings would select and deliver a random gift each month, over the next 12 months, to the person the customer selects as a recipient. During October, Heartstrings sold 34 of these packages for a total of $12,060 in cash. For the month of October, calculate the amount of revenue that Heartstrings will recognize.arrow_forward
- Heartstrings Gift Shoppe sells an assortment of gifts for any occasion. During October, Heartstrings started a Gift-of-the-Month program. Under the terms of this program, beginning in the month of the sale, Heartstrings would select and deliver a random gift each month, over the next 12 months, to the person the customer selects as a recipient. During October, Heartstrings sold 28 of these packages for a total of $11,496 in cash.arrow_forwardWheels, Inc. is a manufacturer of bicycles sold through retail bicycle shops in the southeastern United States. The company has two salespeople that do more than just sell the products—they manage relationships with the bicycle shops to enable them to better meet consumers’ needs. The company’s sales reps visit the shops several times per year, often for hours at a time. The owner of Wheels is considering expanding to the rest of the country and would like to have distribution through 1,000 bicycle shops. To do so, however, the company would have to hire more salespeople. Each salesperson earns $40,000 plus 2 percent commission on all sales. Another alternative is to use the services of sales agents instead of its own sales force. Sales agents would be paid 5 percent of sales. Refer to Appendix 2 to answer this question. Determine the number of salespeople Wheels needs if it has 1,000 bicycle shop accounts that need to be called on four times per year. Each sales call lasts…arrow_forwardYashito Corporation sells cameras and accessories. The company’s newest model, popular with preteens, takes wallet-sized instant photos. The wholesale price for this camera is $50. In addition, the company sells carrying cases ($25), film cartridges ($15), and selfie lenses ($10) made especially for this camera. During the holiday season, Yashito offers the camera, film, carrying case, and selfie lens as a package for $75. For each package sold, the transaction price allocated to the camera is:arrow_forward
- Wheels Inc. is a manufacturer of bicycles sold through retail bicycle shops in the southeastern United States. The company has two sales people that do more than just sell the product-they manage relationships with the bicycle shops to enable them to better meet the consumers' needs. The company's sales reps visits the shop several times per year, often for hours at a time. The owner of wheels is considering expanding to the rest of the country and would like to have distribution through 1000 bicycle shops. To do so, Howe the company would have to hire more salespeople. Each sales person earn $40,000 plus 2 percent commission on all sales. Another alternative is to use the services of sales agents instead of its own sales force. Sales agents would be paid 5 percent of sales. a) determine the number of sales people Wheels need if it has 1000 bicycle shop accounts that need to be called on four time per year. Each sales call lasts approximately 2.5 hours, and each sales rep has…arrow_forwardWheels, Inc. is a manufacturer of bicycles sold through retail bicycle shops in the southeastern United States. The company has two salespeople who do more than just sell the products-they manage relationships with the bicycle shops to enable them to better meet consumers' needs. The company's sales reps visit the shops several times per year, often for hours at a time. The owner of Wheels is considering expanding to the rest of the country and would like to have distribution through 4000 bicycle shops. To do so, however, the company would have to hire more salespeople. Each salesperson earns $40000 plus 2 percent commission on all sales. Another alternative is to use the services of sales agents instead of its own salesforce. Sales agents would be paid 4 percent of sales. Each sales call lasts approximately 1.7 hours, and each sales rep has approximately 1360 hours per year to devote to customers. Wheels needs 10 salespeople if it has 4,000 bicycle shop accounts that need to be…arrow_forwardThe following events occur during September: Webworks purchases supplies worth $120 on account. At the beginning of September, Webworks had 19 keyboards costing $100 each and 110 flash drives costing $10 each. Webworks has decided to use perpetual FIFO to cost its inventory. On account, Webworks purchases thirty keyboards for $105 each and fifty flash drives for $11 each. Webworks starts and completes five more Web sites and bills clients for $3,000. Webworks pays Nancy $500 for her work during the first three weeks of September. Webworks sells 40 keyboards for $6,000 and 120 flash drives for $2,400 cash. Webworks collects $2,500 in accounts receivable. Webworks pays off its salaries payable from August. Webworks pays off $5,500 of its accounts payable. Webworks pays off $5,000 of its outstanding note payable. Webworks pays Leon salary of $2,000. Webworks pays taxes of $795 in cash. Required: Prepare journal entries for the above events. Post the journal entries to T-accounts.…arrow_forward
- Wheels, Inc. manufactures bicycles sold through retail bicycle shops in the southeastern United States. The company has two salespeople that do more than just sell the products—they manage relationships with the bicycle shops to enable them to better meet consumers’ needs. The company’s sales reps visit the shops several times per year, often for hours at a time. The owner of Wheels is considering expanding to the rest of the country and would like to have distribution through 1,000 bicycle shops. To do so, however, the company would have to hire more salespeople. Each salesperson earns $40,000 plus 2 percent commission on all sales annually. Another alternative is to use the services of sales agents instead of its own sales force. Sales agents would be paid 5 percent of sales. At what level of sales would it be more cost efficient for Wheels to use to sales agents compared with its own sales force? To determine this, consider the fixed and variable costs for each alternative. What are…arrow_forwardWheels, Inc. manufactures bicycles sold through retail bicycle shops in the southeastern United States. The company has two salespeople that do more than just sell the products—they manage relationships with the bicycle shops to enable them to better meet consumers’ needs. The company’s sales reps visit the shops several times per year, often for hours at a time. The owner of Wheels is considering expanding to the rest of the country and would like to have distribution through 1,000 bicycle shops. To do so, however, the company would have to hire more salespeople. Each salesperson earns $40,000 plus 2 percent commission on all sales annually. Another alternative is to use the services of sales agents instead of its own sales force. Sales agents would be paid 5 percent of sales. Determine the number of salespeople Wheels needs if it has 1,000 bicycle shop accounts that need to be called on four times per year. Each sales call lasts approximately 2.5 hours, and each sales rep has…arrow_forwardLesters Rentals is located in Cincinnati, Ohio. The company rents party equipment such as tents, tables, chairs, linens, and china for small occasions and large weddings. They also rent a variety of home improvement tools and contractor equipment including generators, grinders, power hammers, and drills. The company serves approximately 5,000 repeat customers and has more than 1,200 different inventory items for rent in stock. Lesters purchases replacement stock from 45 different vendors. Each vendor supplies different items, but Lestors may purchase the same item from different vendors. Other business rules include (1) each inventory type has multiple quantities on hand (2) customers use their telephone numbers to uniquely identify themselves for rentals; (3) customers may rent more than one item of the same type. Required Create a normalized data model for Lesters Rentals. Include the primary keys, data attributes, and foreign keys.arrow_forward
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