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limited access can satisfy the purpose of internal control (10 points) and
(2) provide an example of how this control could be implemented
4. (TCO 4) Inventory valuation methods determine the cost of goods
sold and the inventory balance. (1) Explain how the Last in First out
(LIFO) method is applied (10 points) and (2) provide an example of the
impact that this method of inventory valuation will have on Gross Profit
5. (TCO 1) To evaluate the financial operation and health of a business
ratio analysis is used. (1) Provide the formula for the Acid-test (or Quick)
Ratio and explain how it is computed (10 points) and (2) provide an
example of how this ratio can be used in decision-making in business.
1. (TCO 6) BagODonuts Company bought a used delivery truck on
January 1, 2010, for $19,200. The van was expected to remain in service
4 years (30,000 miles). BagODonuts’ accountant estimated that the
truck’s residual value would be $2,400 at the end of its useful life. The
truck traveled 8,000 miles the first year, 8,500 miles the second year,
5,500 miles the third year, and 8,000 miles in the fourth year
TCO 7) ABC Inc. was incorporated on 1/15/12. Their corporate charter
authorized the following capital stock:
Preferred Stock: 7%, par value $100 per share, 100,000 shares.
Common Stock: $1 par value, 500,000 shares.
Fraud is an intentional misrepresentation of facts, made for the purpose
of persuading another party to act in a way that causes injury or damage
to that party. In our readings and discussions we have seen several
examples of fraud in business. Using that experience (1) provide an
example of a common fraudulent practice in business with an
explanation of how the practice works and (2) name and describe each
of the elements of the Fraud Triangle
) Internal Control Procedures are in place to protect the assets of every
business as mentioned in the textbook and our discussions. Of the seven
internal control procedures, list five of these controls and describe how
each procedure is implemented. (5 points each with 2 points for listing
and 3 points for a description)
Below are the accounts of Super Pool Service, Inc. The accounts have
normal balances on June 30, 2012. The accounts are listed in no
particular order.