Internal control : Internal control is a process which ensures continuous reliability of accomplishment, of a company’s objectives, related to operations, financial reporting, and in conformity with laws and regulations. The following are the principles of internal control: Authorizing the responsibility Segregation of duties Documenting and recording transactions Physical controls Periodic independent verification Human resource controls To explain : The application of physical control principle in cash disbursements

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Answer 1

Question

Chapter 7, Problem 20Q

(a)

To determine

Internal control: Internal control is a process which ensures continuous reliability of accomplishment, of a company’s objectives, related to operations, financial reporting, and in conformity with laws and regulations.

The following are the principles of internal control:

Authorizing the responsibility

Segregation of duties

Documenting and recording transactions

Physical controls

Periodic independent verification

Human resource controls

To explain: The application of physical control principle in cash disbursements

(b)

To determine

To explain: The application of human resource control principle in cash disbursements

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Coronado Fire, Inc. manufactures steel cylinders and nozzles for two models of fire extinguishers: (1) a home fire extinguisher and (2) a commercial fire extinguisher. The home model is a high-volume (54,000 units), half-gallon cylinder that holds 2 1/2 pounds of multi- purpose dry chemical at 480 PSI. The commercial model is a low-volume (10,200 units), two-gallon cylinder that holds 10 pounds of multi-purpose dry chemical at 390 PSI. Both products require 1.5 hours of direct labor for completion. Therefore, total annual direct labor hours are 96,300 or [1.5 hours x (54,000+10,200)]. Estimated annual manufacturing overhead is $1,566,090. Thus, the predetermined overhead rate is $16.26 or ($1,566,090 ÷ 96,300) per direct labor hour. The direct materials cost per unit is $18.50 for the home model and $26.50 for the commercial model. The direct labor cost is $19 per unit for both the home and the commercial models. The company's managers identified six activity cost pools and related…

Coronado Fire, Inc. manufactures steel cylinders and nozzles for two models of fire extinguishers: (1) a home fire extinguisher and (2) a commercial fire extinguisher. The home model is a high-volume (54,000 units), half-gallon cylinder that holds 2 1/2 pounds of multi- purpose dry chemical at 480 PSI. The commercial model is a low-volume (10,200 units), two-gallon cylinder that holds 10 pounds of multi-purpose dry chemical at 390 PSI. Both products require 1.5 hours of direct labor for completion. Therefore, total annual direct labor hours are 96,300 or [1.5 hours x (54,000+ 10,200)]. Estimated annual manufacturing overhead is $1,566,090. Thus, the predetermined overhead rate is $16.26 or ($1,566,090 ÷ 96,300) per direct labor hour. The direct materials cost per unit is $18.50 for the home model and $26.50 for the commercial model. The direct labor cost is $19 per unit for both the home and the commercial models. The company's managers identified six activity cost pools and related…

Answer 2

Question

Chapter 7, Problem 20Q

(a)

To determine

Internal control: Internal control is a process which ensures continuous reliability of accomplishment, of a company’s objectives, related to operations, financial reporting, and in conformity with laws and regulations.

The following are the principles of internal control:

Authorizing the responsibility

Segregation of duties

Documenting and recording transactions

Physical controls

Periodic independent verification

Human resource controls

To explain: The application of physical control principle in cash disbursements

(b)

To determine

To explain: The application of human resource control principle in cash disbursements

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Answer 3

Question

Chapter 7, Problem 20Q

(a)

To determine

Internal control: Internal control is a process which ensures continuous reliability of accomplishment, of a company’s objectives, related to operations, financial reporting, and in conformity with laws and regulations.

The following are the principles of internal control:

Authorizing the responsibility

Segregation of duties

Documenting and recording transactions

Physical controls

Periodic independent verification

Human resource controls

To explain: The application of physical control principle in cash disbursements

(b)

To determine

To explain: The application of human resource control principle in cash disbursements

Expert Solution & Answer

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Answer 4

Question

Chapter 7, Problem 20Q

(a)

To determine

Internal control: Internal control is a process which ensures continuous reliability of accomplishment, of a company’s objectives, related to operations, financial reporting, and in conformity with laws and regulations.

The following are the principles of internal control:

Authorizing the responsibility

Segregation of duties

Documenting and recording transactions

Physical controls

Periodic independent verification

Human resource controls

To explain: The application of physical control principle in cash disbursements

(b)

To determine

To explain: The application of human resource control principle in cash disbursements

Expert Solution & Answer

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Answer 5

Chapter 7, Problem 20Q

(a)

To determine

Internal control: Internal control is a process which ensures continuous reliability of accomplishment, of a company’s objectives, related to operations, financial reporting, and in conformity with laws and regulations.

The following are the principles of internal control:

Authorizing the responsibility

Segregation of duties

Documenting and recording transactions

Physical controls

Periodic independent verification

Human resource controls

To explain: The application of physical control principle in cash disbursements

(b)

To determine

To explain: The application of human resource control principle in cash disbursements

Answer 6

Chapter 7, Problem 20Q

(a)

To determine

Internal control: Internal control is a process which ensures continuous reliability of accomplishment, of a company’s objectives, related to operations, financial reporting, and in conformity with laws and regulations.

The following are the principles of internal control:

Authorizing the responsibility

Segregation of duties

Documenting and recording transactions

Physical controls

Periodic independent verification

Human resource controls

To explain: The application of physical control principle in cash disbursements

Answer 7

Chapter 7, Problem 20Q

(a)

To determine

Internal control: Internal control is a process which ensures continuous reliability of accomplishment, of a company’s objectives, related to operations, financial reporting, and in conformity with laws and regulations.

The following are the principles of internal control:

Authorizing the responsibility

Segregation of duties

Documenting and recording transactions

Physical controls

Periodic independent verification

Human resource controls

To explain: The application of physical control principle in cash disbursements

Answer 8

(b)

To determine

To explain: The application of human resource control principle in cash disbursements

Answer 9

(b)

To determine

To explain: The application of human resource control principle in cash disbursements

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 7 - A local hank reported that it lost 150,000 as the...Ch. 7 - Prob. 2Q Ch. 7 - Prob. 3Q Ch. 7 - Prob. 4Q Ch. 7 - Prob. 5Q Ch. 7 - Prob. 6Q Ch. 7 - Prob. 7Q Ch. 7 - Prob. 8Q Ch. 7 - Prob. 9Q Ch. 7 - Prob. 10Q

Solution Summary: The author explains that internal control ensures continuous reliability of accomplishment, of a company's objectives, related to operations, financial reporting, and in conformity with laws and regulations.

To explain: The application of human resource control principle in cash disbursements

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