4th Edition

ISBN: 9781337690881

Author: Jay Rich, Jeff Jones

Publisher: Cengage Learning

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The transaction analysis is done with the help of the accounting equation. The basic accounting equation is alternatively known as the balance sheet equation is based on the double-entry system which says that for each transaction happening in a business…

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Textbook Question

Chapter 4, Problem 70.1C

Case 4-70 CONTINUING PROBLEM: FRONT ROW ENTERTAINMENT

Over the next 2 months, Front Row Entertainment continued to enjoy success in signing artists and promoting their events. However, the increased business has put considerable stress on keeping timely and up-to-date financial records. In particular, both Cam and Anna are concerned with the accounting and management of the company’s cash.

The tour promotion industry is a cash-intensive industry, normally requiring large prepayments to secure venues and arrange advertising. When the number of artists under contract were small, Cam and Anna developed a simple system to manage the company’s cash. Normally, any cash received was put in a file cabinet in the company’s office. If the amount appeared to be getting large, a deposit was made. Similarly, if a large check needed to be written, either Cam or Anna would check the balance in the checkbook. If cash was not sufficient to cover the check, they'd get cash from the file cabinet and deposit the amount necessary to cover the check.

However, with the increasing business, they would often forget to make deposits, causing several checks to be returned for non-sufficient funds. In addition, they were in the process of hiring additional office staff who would start work on May l. They knew that leaving cash in a file cabinet would not be a good idea.

In order to obtain a better understanding of their cash position, Anna decides to perform a bank reconciliation-something she had failed to do since the company was started. According to the accounting records, the cash balance at April 30 was $7,495. Anna obtained the following information from Front Row’s April bank statement and an analysis of canceled checks and deposits:

Balance per bank at April 30 $3,250

Deposits in transit at April 30 4,370

Outstanding checks as of April 30 1,160

Debit memo for April utilities 845

Bank service charge for April 50

Interest earned during April 450

NSF check from customer 590

Required:

CONCEPTUAL CONNECTION Discuss the purpose Of an internal control System. How would the development of an internal control system benefit Front Row Entertainment? In your answer, be sure to highlight any problems that you noted with Front Row Entertainment’s current system of accounting for cash.

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Chapter 4, Problem 69.4C

Chapter 4, Problem 70.2C

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Chapter 4 Solutions

Cornerstones of Financial Accounting

Ch. 4 - Prob. 1DQ Ch. 4 - Prob. 2DQ Ch. 4 - The Sarbanes-Oxley Act increased top managements...Ch. 4 - Prob. 4DQ Ch. 4 - Prob. 5DQ Ch. 4 - Prob. 6DQ Ch. 4 - Prob. 7DQ Ch. 4 - Prob. 8DQ Ch. 4 - Prob. 9DQ Ch. 4 - Prob. 10DQ

Ch. 4 - Prob. 11DQ Ch. 4 - Prob. 12DQ Ch. 4 - Prob. 13DQ Ch. 4 - Prob. 14DQ Ch. 4 - Prob. 15DQ Ch. 4 - Prob. 16DQ Ch. 4 - Prob. 17DQ Ch. 4 - Prob. 18DQ Ch. 4 - Prob. 19DQ Ch. 4 - Prob. 20DQ Ch. 4 - Prob. 21DQ Ch. 4 - Prob. 22DQ Ch. 4 - Prob. 1MCQ Ch. 4 - Prob. 2MCQ Ch. 4 - Which of the following is not one of the five...Ch. 4 - Prob. 4MCQ Ch. 4 - The internal audit function is part of what...Ch. 4 - Prob. 6MCQ Ch. 4 - Prob. 7MCQ Ch. 4 - Prob. 8MCQ Ch. 4 - Which one of the following would not appear on a...Ch. 4 - Prob. 10MCQ Ch. 4 - Prob. 11MCQ Ch. 4 - Prob. 12MCQ Ch. 4 - Prob. 13MCQ Ch. 4 - Prob. 14MCQ Ch. 4 - Prob. 15MCQ Ch. 4 - Prob. 16CE Ch. 4 - Prob. 17CE Ch. 4 - Cornerstone Exercise 4-18 Adjusting Entry from...Ch. 4 - Prob. 19CE Ch. 4 - Prob. 20CE Ch. 4 - Cornerstone Exercise 4-21 Cash Over and Short On a...Ch. 4 - Cornerstone Exercise 4-22 Cash Over and Short...Ch. 4 - Prob. 23CE Ch. 4 - Prob. 24CE Ch. 4 - Prob. 25BE Ch. 4 - Prob. 26BE Ch. 4 - Prob. 27BE Ch. 4 - Prob. 28BE Ch. 4 - Prob. 29BE Ch. 4 - Prob. 30BE Ch. 4 - Prob. 31BE Ch. 4 - Prob. 32BE Ch. 4 - Prob. 33BE Ch. 4 - Prob. 34BE Ch. 4 - Prob. 35BE Ch. 4 - Prob. 36BE Ch. 4 - Prob. 37BE Ch. 4 - Prob. 38BE Ch. 4 - Prob. 39E Ch. 4 - Prob. 40E Ch. 4 - Prob. 41E Ch. 4 - Prob. 42E Ch. 4 - Miller Enterprises deposits the cash received...Ch. 4 - Prob. 44E Ch. 4 - Prob. 45E Ch. 4 - Prob. 46E Ch. 4 - Prob. 47E Ch. 4 - Hawk Enterprises identified the following items on...Ch. 4 - Prob. 49E Ch. 4 - Prob. 50E Ch. 4 - Prob. 51E Ch. 4 - Prob. 52E Ch. 4 - Prob. 53E Ch. 4 - Exercise 4-54 Operating Cycle and Current...Ch. 4 - Prob. 55APSA Ch. 4 - Prob. 56APSA Ch. 4 - Prob. 57APSA Ch. 4 - Prob. 58APSA Ch. 4 - Prob. 59APSA Ch. 4 - Prob. 60APSA Ch. 4 - Prob. 61APSA Ch. 4 - Prob. 55BPSB Ch. 4 - Prob. 56BPSB Ch. 4 - Prob. 57BPSB Ch. 4 - Prob. 58BPSB Ch. 4 - Prob. 59BPSB Ch. 4 - Prob. 60BPSB Ch. 4 - Prob. 61BPSB Ch. 4 - Prob. 62.1C Ch. 4 - Prob. 62.2C Ch. 4 - Prob. 62.3C Ch. 4 - Prob. 62.4C Ch. 4 - Prob. 63.1C Ch. 4 - Prob. 63.2C Ch. 4 - Prob. 64.1C Ch. 4 - Prob. 64.2C Ch. 4 - Prob. 65C Ch. 4 - Prob. 66.1C Ch. 4 - Prob. 66.2C Ch. 4 - Prob. 67.1C Ch. 4 - Prob. 67.2C Ch. 4 - Prob. 68.1C Ch. 4 - Prob. 68.2C Ch. 4 - Prob. 68.3C Ch. 4 - Prob. 68.4C Ch. 4 - Prob. 69.1C Ch. 4 - Prob. 69.2C Ch. 4 - Prob. 69.3C Ch. 4 - Prob. 69.4C Ch. 4 - Case 4-70 CONTINUING PROBLEM: FRONT ROW...Ch. 4 - Prob. 70.2C Ch. 4 - Prob. 70.3C Ch. 4 - Prob. 70.4C

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