Cash Receipts by Mail: Cash receipts are those payments that customer receives from the sales made. Lock-box system is used by many companies to receive customer payments. In this system, customer sends the cash receipts to the post office boxes that are maintained by the banks. Process of maintaining cash receipts by mail helps the company to have strict internal control. The following are the steps one has to follow when receiving the checks made for the payment sent by mail: Open the incoming mail. Next, send the mail to the treasurer and thus, it is deposited in the bank by the cashier. When there is a receipt of check, cashier gets a deposit receipt. Then, accounting department records all the journal entries. Then, company’s controller compares deposited amount in the bank and cash debited from the accounting department. Thus, these both amounts need to be tallied. To identify: The internal control weakness

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Answer 1

Question

Chapter 7, Problem 7.21AP

Requirement 1:

To determine

Cash Receipts by Mail: Cash receipts are those payments that customer receives from the sales made. Lock-box system is used by many companies to receive customer payments. In this system, customer sends the cash receipts to the post office boxes that are maintained by the banks. Process of maintaining cash receipts by mail helps the company to have strict internal control.

The following are the steps one has to follow when receiving the checks made for the payment sent by mail:

Open the incoming mail. Next, send the mail to the treasurer and thus, it is deposited in the bank by the cashier.

When there is a receipt of check, cashier gets a deposit receipt. Then, accounting department records all the journal entries.

Then, company’s controller compares deposited amount in the bank and cash debited from the accounting department. Thus, these both amounts need to be tallied.

To identify: The internal control weakness

Requirement 2:

To determine

To find: Recording of sales allowance

Requirement 3:

To determine

To calculate: Total cash receipts

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1. Stampede Company has two service departments — purchasing and maintenance, and two production departments — fabrication and assembly. The distribution of each service department's efforts to the other departments is shown below: FROM TO Purchasing Maintenance Fabrication Assembly Purchasing 0% 45% 45% 10% Maintenance 55% 0% 30% 15% The direct operating costs of the departments (including both variable and fixed costs) were as follows: Purchasing $ 138,000 Maintenance 60,000 Fabrication 114,000 Assembly 90,000 The total cost accumulated in the fabrication department using the direct method is: The answer is not 194100 2. Bifurcator Company produces three products — X, Y, and Z — from a joint process. Each product may be sold at the split-off point or processed further. Additional processing requires no special facilities, and production costs of further processing are entirely variable and traceable to the products involved. Last year all three products were…

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Answer 2

Question

Chapter 7, Problem 7.21AP

Requirement 1:

To determine

Cash Receipts by Mail: Cash receipts are those payments that customer receives from the sales made. Lock-box system is used by many companies to receive customer payments. In this system, customer sends the cash receipts to the post office boxes that are maintained by the banks. Process of maintaining cash receipts by mail helps the company to have strict internal control.

The following are the steps one has to follow when receiving the checks made for the payment sent by mail:

Open the incoming mail. Next, send the mail to the treasurer and thus, it is deposited in the bank by the cashier.

When there is a receipt of check, cashier gets a deposit receipt. Then, accounting department records all the journal entries.

Then, company’s controller compares deposited amount in the bank and cash debited from the accounting department. Thus, these both amounts need to be tallied.

To identify: The internal control weakness

Requirement 2:

To determine

To find: Recording of sales allowance

Requirement 3:

To determine

To calculate: Total cash receipts

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 7, Problem 7.21AP

Requirement 1:

To determine

Cash Receipts by Mail: Cash receipts are those payments that customer receives from the sales made. Lock-box system is used by many companies to receive customer payments. In this system, customer sends the cash receipts to the post office boxes that are maintained by the banks. Process of maintaining cash receipts by mail helps the company to have strict internal control.

The following are the steps one has to follow when receiving the checks made for the payment sent by mail:

Open the incoming mail. Next, send the mail to the treasurer and thus, it is deposited in the bank by the cashier.

When there is a receipt of check, cashier gets a deposit receipt. Then, accounting department records all the journal entries.

Then, company’s controller compares deposited amount in the bank and cash debited from the accounting department. Thus, these both amounts need to be tallied.

To identify: The internal control weakness

Requirement 2:

To determine

To find: Recording of sales allowance

Requirement 3:

To determine

To calculate: Total cash receipts

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 7, Problem 7.21AP

Requirement 1:

To determine

Cash Receipts by Mail: Cash receipts are those payments that customer receives from the sales made. Lock-box system is used by many companies to receive customer payments. In this system, customer sends the cash receipts to the post office boxes that are maintained by the banks. Process of maintaining cash receipts by mail helps the company to have strict internal control.

The following are the steps one has to follow when receiving the checks made for the payment sent by mail:

Open the incoming mail. Next, send the mail to the treasurer and thus, it is deposited in the bank by the cashier.

When there is a receipt of check, cashier gets a deposit receipt. Then, accounting department records all the journal entries.

Then, company’s controller compares deposited amount in the bank and cash debited from the accounting department. Thus, these both amounts need to be tallied.

To identify: The internal control weakness

Requirement 2:

To determine

To find: Recording of sales allowance

Requirement 3:

To determine

To calculate: Total cash receipts

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 5

Chapter 7, Problem 7.21AP

Requirement 1:

To determine

Cash Receipts by Mail: Cash receipts are those payments that customer receives from the sales made. Lock-box system is used by many companies to receive customer payments. In this system, customer sends the cash receipts to the post office boxes that are maintained by the banks. Process of maintaining cash receipts by mail helps the company to have strict internal control.

The following are the steps one has to follow when receiving the checks made for the payment sent by mail:

Open the incoming mail. Next, send the mail to the treasurer and thus, it is deposited in the bank by the cashier.

When there is a receipt of check, cashier gets a deposit receipt. Then, accounting department records all the journal entries.

Then, company’s controller compares deposited amount in the bank and cash debited from the accounting department. Thus, these both amounts need to be tallied.

To identify: The internal control weakness

Requirement 2:

To determine

To find: Recording of sales allowance

Requirement 3:

To determine

To calculate: Total cash receipts

Answer 6

Chapter 7, Problem 7.21AP

Requirement 1:

To determine

Cash Receipts by Mail: Cash receipts are those payments that customer receives from the sales made. Lock-box system is used by many companies to receive customer payments. In this system, customer sends the cash receipts to the post office boxes that are maintained by the banks. Process of maintaining cash receipts by mail helps the company to have strict internal control.

The following are the steps one has to follow when receiving the checks made for the payment sent by mail:

Open the incoming mail. Next, send the mail to the treasurer and thus, it is deposited in the bank by the cashier.

When there is a receipt of check, cashier gets a deposit receipt. Then, accounting department records all the journal entries.

Then, company’s controller compares deposited amount in the bank and cash debited from the accounting department. Thus, these both amounts need to be tallied.

To identify: The internal control weakness

Answer 7

Chapter 7, Problem 7.21AP

Requirement 1:

To determine

Cash Receipts by Mail: Cash receipts are those payments that customer receives from the sales made. Lock-box system is used by many companies to receive customer payments. In this system, customer sends the cash receipts to the post office boxes that are maintained by the banks. Process of maintaining cash receipts by mail helps the company to have strict internal control.

The following are the steps one has to follow when receiving the checks made for the payment sent by mail:

Open the incoming mail. Next, send the mail to the treasurer and thus, it is deposited in the bank by the cashier.

When there is a receipt of check, cashier gets a deposit receipt. Then, accounting department records all the journal entries.

Then, company’s controller compares deposited amount in the bank and cash debited from the accounting department. Thus, these both amounts need to be tallied.

To identify: The internal control weakness

Answer 8

Requirement 2:

To determine

To find: Recording of sales allowance

Answer 9

Requirement 2:

To determine

To find: Recording of sales allowance

Answer 10

Requirement 3:

To determine

To calculate: Total cash receipts

Answer 11

Requirement 3:

To determine

To calculate: Total cash receipts

Answer 12

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Answer 13

Expert Solution & Answer

Answer 14

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Answer 15

Ch. 7 - Prob. 1QC Ch. 7 - Prob. 2QC Ch. 7 - Prob. 3QC Ch. 7 - Prob. 4QC Ch. 7 - Prob. 5QC Ch. 7 - Prob. 6QC Ch. 7 - Prob. 7QC Ch. 7 - Prob. 8QC Ch. 7 - Prob. 9QC Ch. 7 - Prob. 10QC

Solution Summary: The author explains the process of maintaining cash receipts by mail helps the company to have strict internal control.

To find: Recording of sales allowance

To calculate: Total cash receipts

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Chapter 7 Solutions