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Question 11.

Explain to your friend whether each of the numbered items below is an internal control strength or weakness. You must also state which internal control procedure relates to each of the internal controls

For the weaknesses, you also need to state a recommendation for improvement.

      

 

Question 12.
      

 

Question 13.

Advertising Expense

$14,000

Accounts Receivable

12,000

Cost of Goods Sold

65,000

Accumulated Depreciation—Equipment

20,000

Accounts Payable

21,000

Cash

44,000

Depreciation Expense

17,000

Common Stock

100,000

Dividends

25,000

Insurance Expense

5,000

Note Payable (due 2014)

70,000

Rent Expense

4,000

Prepaid Insurance

17,000

Retained Earnings (beginning)

22,000

Salaries Expense

50,000

Salaries Payable

3,500

Net sales

175,000

Supplies

4,000

Supplies Expense

3,000

Equipment

210,000

 

 

      

 

Question 14.

Cash

$375,000

Accounts Receivable

125,000

Prepaid Insurance

100,000

Accounts Payable

88,000

Unearned Service Revenue

15,000

Equipment, net of accumulated depreciation

177,000

Common Stock

125,000

Retained Earnings 12/31/2011

106,000

Long-term debt

336,500

Service revenue

225,000

Cost of Goods Sold

62,500

Rent expense

30,000

Supplies expense

8,000

Insurance expense

18,000

Instructions
  
(a) Please create a classified Balance Sheet in good form for the year ended 2012. (25 points)

(b) Please calculate the current ratio.  (5 points)

      
    • 8 years ago
    • 40
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