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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Job H85 was ordered by a customer on September 25. During the month of September, Jaycee Corporation requisitioned $3,300 of direct materials and used $4,700 of direct labor. The job was not finished by the end of the month but needed an additional $3,200 of direct materials and additional direct labor of $7,400 to finish the job in October. The company applies overhead at the end of each month at a rate of 100% of the direct labor cost incurred. What is the total cost of the job when it is completed in October?

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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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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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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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

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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