Question

In: Accounting

This case is based on an actual situation. Centennial Construction Company, headquartered in Dallas, Texas, built...

This case is based on an actual situation. Centennial Construction Company, headquartered in Dallas, Texas, built a Rodeway Motel 35 miles north of Dallas. The construction foreman, whose name was Slim Chance, hired the 40 workers needed to complete the project. Slim had the construction workers fill out the necessary tax forms, and he sent their documents to the home office.Work on the motel began on April 1 and ended September 1. Each week, Slim filled out a timecard of hours worked by each employee during the week. Slim faxed the timecards to the home office, which prepared the payroll checks on Friday morning. Slim drove to the home office on Friday, picked up the payroll checks, and returned to the construction site. At 5 p.m. on Friday, Slim distributed payroll checks to the workers.Requirements1. Describe in detail the main internal control weakness in this situation. Specify what negative result(s) could occur because of the internal control weakness.

Solutions

Expert Solution

ekkarill92 answered 2 years ago
Next > < Previous

Related Solutions

(Divisional costs of capital​) LPT Inc. is an integrated oil company headquartered in​ Dallas, Texas. The...
(Divisional costs of capital​) LPT Inc. is an integrated oil company headquartered in​ Dallas, Texas. The company has three operating​ divisions: oil exploration and production​ (commonly referred to as​ E&P), pipelines, and refining.​ Historically, LPT did not spend a great deal of time thinking about the opportunity costs of capital for each of its divisions and used a​ company-wide weighted average cost of capital of 14 percent for all new capital investment projects. Recent changes in its businesses have made...
Frank operates a construction business in Dallas, Texas. On May 1, 2019, Frank purchased a warehouse...
Frank operates a construction business in Dallas, Texas. On May 1, 2019, Frank purchased a warehouse for his business. The warehouse cost $1,500,000 ($500,000 for land and $1,000,000 for improvements). In November 2019, Frank purchased the following business property: equipment for $100,000, light-duty truck for $50,000, and office furniture and equipment for $50,000. Please calculate Frank’s 2019 depreciation deductions. Be sure to explain your calculations fully. What income would Frank report if he decided to sell the warehouse and equipment...
The case is based on an actual investment decision made by a major paper-products company in...
The case is based on an actual investment decision made by a major paper-products company in the 1990s. The numbers and the company name have been disguised at the request of the company. The dates have been revised for pedagogical reasons. The case provides a glimpse into the paper business but is primarily designed to present a straightforward problem in assessing cash flows, cost of capital, and net present value of a capital-investment decision. The case works well for all...
Carillion plc was a British multinational construction and facilities management services company headquartered in Wolverhampton in...
Carillion plc was a British multinational construction and facilities management services company headquartered in Wolverhampton in the United Kingdom, prior to its liquidation officially, "the largest ever trading liquidation in the UK" - which began in January 2018. Later, in a June 2018 report on audit standards across eight accounting firms in the UK, the FRC (Financial reporting Council)- the regulatory agency of the auditing profession in the UK identified: "failure to challenge management and show appropriate skepticism across their...
You have been asked by the president of Ellis Construction Company, headquartered in Toledo, to evaluate...
You have been asked by the president of Ellis Construction Company, headquartered in Toledo, to evaluate the proposed acquisition of a new earthmover. The mover’s basic price is $50,000, and it will cost another $10,000 to modify it for special use by Ellis Construction. Assume that the mover falls into the MACRS 3-year class. It will be sold after 3 years for $20,000, and it will require an increase in working capital (spare parts inventory) of $2,000. The earthmover purchase...
You have been asked by the president of Ellis Construction Company, headquartered in Toledo, to evaluate...
You have been asked by the president of Ellis Construction Company, headquartered in Toledo, to evaluate the proposed acquisition of a new earthmover. The mover’s basic price is $50,000, and it will cost another $10,000 to modify it for special use by Ellis Construction. Assume that the mover falls into the MACRS 3-year class. It will be sold after 3 years for $20,000, and it will require an increase in working capital (spare parts inventory) of $2,000. The earthmover purchase...
1. You have been asked by the president of Ellis Construction Company, headquartered in Toledo, to...
1. You have been asked by the president of Ellis Construction Company, headquartered in Toledo, to evaluate the proposed acquisition of a new earthmover. The mover’s basic price is $65,000, and it will cost another $14,000 to modify it for special use by Ellis Construction. Assume that the earthmover falls into the MACRS 3-year class. (See Table 10A.2 at the end of Chapter 10 for MACRS recovery allowance percentages.) It will be sold after three years for $26,000, and it...
Willingham Construction is in the business of building high-priced, custom, single-family homes. The company, headquartered in...
Willingham Construction is in the business of building high-priced, custom, single-family homes. The company, headquartered in Anaheim, California, operates throughout the Southern California area. The construction period for the average home built by Willingham is six months, although some homes have taken as long as nine months. You have just been hired by Willingham as the assistant controller and one of your first tasks is to evaluate the company’s revenue recognition policy. The company presently recognizes revenue upon completion for...
Based on the actual circumstances, this mini case illustrates an issue faced by the government operated...
Based on the actual circumstances, this mini case illustrates an issue faced by the government operated utilities. The city electric utility, which a city accounts for its enterprise phones, provides cash rebates to customers who install insulation, storm windows, or energy saving appliances. The payments are intended to reduce the demand for the true city and thereby enabling the CEU to avoid having to add Generating capacity. Like many governments operated utilities, the see CEU establishes rates based on a...
Mini Case: Nike and Sweatshop Labor Nike, a company headquartered in Beaverton, Oregon, is a major...
Mini Case: Nike and Sweatshop Labor Nike, a company headquartered in Beaverton, Oregon, is a major force in the sports footwear and fashion industry, with annual sales exceeding $ 30 billions, more than half of which now come from outside the United States. The company was co-founded in 1964 by Phil Knight, a CPA at Price Waterhouse, and Bill Bowerman, college track coach, each investing $ 500 to start. The company, initially called Blue Ribbon Sports, changed its name to...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT