CASE STUDY – INTERNAL CONTROL

Honkydory Musical School wants to raise money for a new sound system for its auditorium. The primary fund-raising event is a dance at which the famous disc jockey, John Henry will play funky hip-hop and not so funky hip-hop dance tunes. Mr Bishop, the music and theater instructor, has been given the responsibility for coordinating the fund-raising efforts. This is Bishop’s first experience with fund-raising.

Bishop had 500 unnumbered tickets printed for the dance. He left the tickets in a box on his desk and told the choir students to take as many tickets as they thought they could sell for $10 each. In order to ensure that no extra tickets would be floating around, he told them to dispose of any unsold tickets. When the students received payment for the tickets, they were to bring the cash back to Mr. Bishop, and he would put it in a locked box in his desk drawer.

Some of the students were responsible for decorating the gymnasium for the dance. Mr. Bishop gave each of them a key to the money box and told them that if they took the money out to purchase materials, they should put a note in the box saying how much they took and what it was used for.

After 2 weeks the money box appeared to be getting full, so Mr. Bishop asked Luke Wilson to count the money, prepare a deposit slip, and deposit the money in a bank account that he had opened for this fundraising event. On the day of the dance, Bishop wrote a check from the account to pay the DJ, however the DJ said that he accepted only cash and did not give receipts. So Bishop took $ 500 out of the cash box and gave it to him. At the dance Bishop saw Sally working at the entrance to the gymnasium, collecting ticket from the students and selling tickets to those who had not pre-purchased them. Bishop estimated that 400 students attended the dance.

The following day Bishop closed out the bank account, which had $450 in it, and gave that amount plus the $ 300 in the cash box to the Principal of the school. He seemed surprised that after generating roughly $ 4000 in sales, the dance netted only $ 750 in cash. Bishop did not know how to respond.

Required:

1. List the internal controls that were ignored by Mr. Bishop during this fundraiser. (There are at least six)

2. Create an internal control policy that will provide all needed guidelines for the School to follow for every subsequent fundraiser.

3. Do you believe that the Principal should investigate whether fraud has occurred by Mr. Bishop?

4. Do you believe the students have committed fraud?

5. Who could help this principal develop the proper policy and controls?

Please read the following on NC Economic Incentives: We have all heard that Amazon is planning on opening a second headquarters. The hope is that this new HQ could bring in 50,000 jobs and $5 billion in investments. As a result, states are in a bidding war to attract Amazon. These bids are what we can economic incentives. Many politicians have argued that the government should provide economic incentives to companies in order to bring jobs to NC. The proponents of economic incentives programs say that they are necessary for the State to give tax breaks, subsidies and other benefits to attract large companies to NC. Unfortunately, many other states are doing the same thing, thus making any NC incentive program difficult and expensive. For example, after some of the first Hunger Games movie was shot in NC, much of the subsequent movies went to Georgia. The point is that other states are outbidding NC and businesses are following the money and not coming to NC, but instead are going to other states. The opponents of State Sponsored Economic Incentives for businesses call this Corporate Welfarism. They point to the many times that government has failed to achieve its goals. Opponents of government economic incentives say that the program is too expensive for the results generated. More fundamentally, opponents say that the state shouldn't use tax money to pick winners and losers. They point to the failed attempts to pick Dell, Google, and Boeing; they point to government mistakes such as the "famous" Randy Parton Theater Project. (See here: https://www.carolinajournal.com/news-article/no-celebration-for-randy-parton-theaters-10th-birthday/) Additionally, they claim that picking winners leads to crony capitalism. 2. Suppose that you have been called to Raleigh to give expert testimony before a joint North Carolina House and Senate Committee assigned to review North Carolina's economic incentive policy. Using the questions below to help guide your testimony to the committee, write a three to four page paper in a Microsoft Word document to respond to this issue: When government uses tax monies to attract businesses (creating economic incentives--both the positive and the perverse), what are the short-term effects? What are the long-term effects? What are the effects on the local community? What are the wider implications? Can this problem be explained in a game theoretic context? If government economic incentives are so good, then why is it that North Carolina has reduced the amount of incentives offered to film and television companies? [Note: When economists use incentives, they mean it in a particular sense: broad institutions that influence people's decisions. So while a coupon for $5 off is an incentive, that is not what is being asked. Instead, economists look at broader policy implications. For example, unemployment insurance pays people if they do not work. Thus, the policy (regardless of intent) creates an incentive not to work.] 3. Your paper should be in written in APA style with appropriate references and bibliography. Titles pages and abstracts are NOT necessary.

Question 16

The customers at Peete's coffee shop want to grab a quick cup of coffee before boarding the Metra train into Chicago. The sign in the window promises "Quick, In-and-Out Service," and usually Peete's Coffee Shop keeps that promise. But one morning, customers were frustrated when the staff behind the counter showed more interest in gossiping about their social lives than in waiting on customers. Peete's coffee shop is suffering from a ________ gap.

                knowledge

                social expectations

                delivery

                communications

                standards

Question 17

The marketing of services such as lawn care by TruGreen differs from product marketing because services are all of these except

                inseparable.

                intangible.

                renewable.

                perishable.

                heterogeneous.

Question 18

David manages a Shoney's restaurant. He is considering staying open later in the evening. For David, the variable costs associated with staying open longer hours will include all of the following except

                rent on the restaurant building.

                hours worked by the servers.

                energy costs.

                hours worked by cooks.

                ingredients used in preparing food.

Question 19

The Coffee Express company is located in a business district with few customers on the weekend. To attract customers on Saturday and Sundays, it reduces its prices on these two days. This is an example of

                the target return effect.

                the substitution effect.

                dynamic pricing.

                the income effect.

                cross-price elasticity.

Question 20

For which of the following is demand likely to be least sensitive to price increases?

                restaurant meals

                theater tickets

                a specific brand of cereal

                spring break vacations

                prescription drugs

Question 21

Which of the following is most likely to be a pure competitive market?

                soybeans

                soft drinks

                computer operating systems

                fast-food restaurants

                cereal

Question 22

Natalie operates on a pretty tight budget. She is a price-conscious shopper and usually buys store or generic brands to save money. Recently, however, Natalie was given a pretty substantial raise. As such, she has altered her shopping patterns and now regularly buys more expensive, name-brand goods. This is an example of

                the substitution effect.

                cross-price elasticity.

                the income effect.

                the target return effect.

                the price inelasticity coefficient.

Question 23

A customer orientation toward pricing implicitly invokes the concept of

                positioning.

                value.

                knowing the dimensions of the target market.

                the income effect.

                profit.

Question 24

Which of the following markets is most likely to be an Oligopoly?

                pens and pencils

                smartphone service providers

                electrical service to the home

                soybeans

                men's clothing

Question 25

When Jennifer Hudson decides how to price new products in her gift store, she measures the value of her product offerings against those of the other stores in her area. Jennifer Hudson uses a ________ pricing strategy.

                competitor-oriented

                maximizing profits

                target profit

                target return

                sales oriented

I need an introduction and conclusion for the following paragraph please. Intro should be between 10-15 sentences and conclusion should be between 5-10 sentences

One thing that sets London and Washington, D.C. apart is their history. These cities developed on very different time lines. London, for example, has a history that dates back over two thousand years. It was part of the Roman Empire and known by the similar name, Londinium. It was not only one of the northernmost points of the Roman Empire but also the epicenter of the British Empire where it held significant global influence from the early sixteenth century on through the early twentieth century. Washington, DC, on the other hand, has only formally existed since the late eighteenth century. Though Native Americans inhabited the land several thousand years earlier, and settlers inhabited the land as early as the sixteenth century, the city did not become the capital of the United States until the 1790s. From that point onward to today, however, Washington, DC, has increasingly maintained significant global influence.

Another difference between the two city concerns their cultural life and heritage. While Washington, DC, has the National Gallery of Art and several other Smithsonian galleries, London’s art scene and galleries have a definite edge in this category. From the Tate Modern to the British National Gallery, London’s art ranks among the world’s best. This difference and advantage has much to do with London and Britain’s historical depth compared to that of the United States. London has a much richer past than Washington, DC, and consequently has a lot more material to pull from when arranging its collections. Speaking of theaters, London wins this comparison, too, both in quantity and quality of theater choices. With regard to other cultural places like restaurants, pubs, and bars, they also have some differences, While London may be better known for its pubs and taste in beer, DC offers a different bar-going experience. With clubs and pubs that tend to stay open later than their British counterparts, the DC night life tend to be less reserved overall.

The two cities also differ in cultural diversity. Perhaps the most significant difference between the resident demographics is the racial makeup. Washington, DC, is a “minority majority” city, which means the majority of its citizens are races other than white. In 2009, according to the US Census, 55 percent of DC residents were classified as “Black or African American” and 35 percent of its residents were classified as “white.” London, by contrast, has very few minorities—in 2006, 70 percent of its population was “white,” while only 10 percent was “black.” However, things are changing rapidly for London. According to UCL, 1/3 of Londoners were born abroad, and 200 languages are spoken in the city.

1. The Zumber National Rent Report lists the average monthly apartment rent in various locations in the United States. According to their report, the average cost of renting a one-bedroom apartment in Houston is $1,090. Suppose that the standard deviation of the cost of renting a one-bedroom apartment in Houston is $96 and that such apartment rents in Houston are normally distributed. If a one-bedroom apartment in Houston is randomly selected, what is the probability that the price is: (20 points) (a) More than $1,250? (b) Between $1,050 and $1,200? (c) Between $900 and $1,000? (d) Less than $1,180? Bonus question (e) Below $850 or beyond $1,300? (5 points)

2. Suppose the grade on a Math test is normally distributed with mean 78 and standard deviation 10. (a) Compute the z-scores (5 points) (a-1) If Bob got 70 on the test, what is his z-score? (a-2) If Jane got 90 on the test, what is her z-score? (b) Compute the actual grades (5 points) (b-1) Suppose David achieved a grade 1.8 standard deviation above the mean (? = 1.8), what was his actual grade? (b-2) Suppose Lily achieved a grade 0.5 standard deviation below the mean (? = −0.5), what was her actual grade? (c) Rob achieved a grade that exceeded 95% of all grades. Find Rob’s actual grade. (6 points) (d) Suppose 32% of students did better than Mei. Find Mei’s actual grade. (6 points)

3. According to the U.S. Department of Agriculture, Alabama egg farmers produce millions of eggs every year. Suppose egg production per year in Alabama is normally distributed, with a standard deviation of 83 million eggs. (a) If during only 3% of the years Alabama egg farmers produce more than 2,655 million eggs, what is the mean egg production by Alabama farmers? (6 points) (b) Given the mean egg production in (a), what is the probability that Alabama egg farmers produces less than 1,500 million eggs? (5 points) (c) Given the mean egg production in (a), what is the probability that Alabama egg farmers produces eggs between 2,000 and 2,500 million eggs? (5 points)

4. Suppose the speeds of people driving from Dallas to Houston normally distributed, with a mean average speed of 92 miles per hour. (a) If the probability that the speed is more than 108 mph is 0.8%, what is the standard deviation? (6 points) (b) Given the standard deviation in (a), what is the probability that a person drove less than 85 miles per hour? (5 points) (c) If Ben drove at a speed that exceeds 85% of all other people. What was her speed? (6 points)

5. According to the U.S. Census Bureau, 20% of the workers in Atlanta use public transportation. Suppose 25 Atlanta workers are randomly selected. (Hint: use sampling distribution) (a) What is the standard deviation of the sample proportion of the selected workers who use public transportation? (5 points) (a) What is the probability that the proportion of the selected workers who use public transportation is less than 32%? (5 points) (b) What is the probability that the proportion of the selected workers who use public transportation is greater than 48%? (5 points)

6. Gross weights of 8-ounce boxes of cereal are normally distributed with mean 9.60 ounces and standard deviation 0.80 ounces. Boxes are packaged 24 per carton. Find the probability of randomly selected 24 boxes having average weight between 9.5 and 10 ounces. (Hint: use sampling distribution) (10 points)

Gallatin Carpet Cleaning is a small, family-owned business operating out of Bozeman, Montana. For its services, the company has always charged a flat fee per hundred square feet of carpet cleaned. The current fee is $23.95 per hundred square feet. However, there is some question about whether the company is actually making any money on jobs for some customers—particularly those located on remote ranches that require considerable travel time. The owner’s daughter, home for the summer from college, has suggested investigating this question using activity-based costing. After some discussion, she designed a simple system consisting of four activity cost pools. The activity cost pools and their activity measures appear below:

The total cost of operating the company for the year is $358,000 which includes the following costs:

Resource consumption is distributed across the activities as follows:

Job support consists of receiving calls from potential customers at the home office, scheduling jobs, billing, resolving issues, and so on.

Required:

1. Prepare the first-stage allocation of costs to the activity cost pools.

2. Compute the activity rates for the activity cost pools.

3. The company recently completed a 600 square foot carpet-cleaning job at the Flying N Ranch—a 54-mile round-trip journey from the company’s offices in Bozeman. Compute the cost of this job using the activity-based costing system.

4. The revenue from the Flying N Ranch was $143.70 (600 square feet @ $23.95 per hundred square feet). Calculate the customer margin earned on this job.

Prepare the first-stage allocation of costs to the activity cost pools.

Compute the activity rates for the activity cost pools. (Round your answers to 2 decimal places.)

The company recently completed a 600 square foot carpet-cleaning job at the Flying N Ranch—a 54-mile round-trip journey from the company’s offices in Bozeman. Compute the cost of this job using the activity-based costing system. (Round your intermediate calculations and final answer to 2 decimal places.)

The revenue from the Flying N Ranch was $143.70 (6 hundred square feet @ $23.95 per hundred square feet). Calculate the customer margin earned on this job. (Negative customer margins should be indicated with a minus sign. Round your intermediate calculations and final answers to 2 decimal places.)

1/1/17 Co buys land and pays $50,000 for the land, $500 for removal of scrap, $2500 for attorney’s fee (associated with land purchase), $2500 real estate commission, $5000 for accrued taxes and $1000 for current-year taxes. Journalize the land purchase.

Also on 1/1/17, Co buys a car and a computer. The car costs $25,000 , sales tax $2000 and insurance during delivery $1000. The car has an estimated 100,000 miles of useful life and a salvage value of $3000. The computer costs $3000, tax $400 and insurance during deliver of $100. The computer has and estimated useful life of 5 years and a salvage value of $500. Journalize the purchase of both.

On 12/31/17 the car has 10,000 miles on the odometer. Journalize the depreciation of the car using units of activity and the computer using straight-line.

On 7/1/18 the car has 15,000 on the odometer and was sold for $25,250. Make the appropriate journal entries.

12/31/18 Co exchanges computer for a new one and pays $500 cash in the trade. The fair market value of the old computer is $2000.   Remember the company is using straight line method for the computer. Make the appropriate journal entries.

1/1/19 Co pay $50,000 for a patent estimated to have a useful life of 10 years. Co also pays $10,000 research and development costs associated with the patent and $5000 legal costs to defend the patent in court. Make appropriate journal entries:

12/31/19 the company adjusts its books to reflect patent amortization. Make the appropriate journal entry.

If 5 years ago a company bought a $10,500 piece of equipment with $500 salvage value and 10 year usefull life and is using straight-line depreciation what is its book value now? If it revises estimated life to 15 years (10 more years left) what is revised annual depreciation?

What is the cost-allocation account for a natural resourse?

On January 1, Company sells merchandise and collects $5000 in cash which includes 6% sales tax. Journalize the sale.

Company’s employees earned $20,000 for the pay period ending January 31. The Company withholds $1530 FICA, $4373 Federal Income Tax and $585 State Income Tax. Journalize the entry.

On January 1 Company issues a 5 year $1,000,000 face value bond with a 5% annual coupon paid semiannually. The company issues it for $916,884 for an effective interest rate of 7% and uses the effective-interest amortization method. Journalize the issuance:

What is the total cost of the borrowing over the life of the SSS bond?

Journalize the entry on July 1 to record SSS’s payment of interest and the amortization of the bond discount (assume no accrual was made June 30):

What is the accrual JE on 12/31?

On July 1 Incorporation issues a 10 year $2,000,000 face value bond with a 6% coupon paid semiannually. The Company issues it for $2,327,029 at an effective interest rate of 4%. Journalize the issuance.

Journalize the adjustments made by Incorporation on December 31 for the accrual of interest expense and the amortization of bond premium.

On February 1, ABC redeems its $3,000,000 face value bonds before maturity at a price of $2,600,000. The bonds were originally issued at a discount and currently the account Discount on Bond Payable has a debit balance of $500,000. Journalize the bond redemption.

What is a sinking fund bond?

What is a secured bond?

When would a company exercise their call on a callable bond?

How do you calculate working capital and current ratio?

Why might a company choose to issue a bond instead of issuing stock?

What are the two components of a mortgage payment?

On October 1, 2017, Santana Rey launched a computer services company called Business Solutions, which provides consulting services, computer system installations, and custom program development. Rey adopts the calendar year for reporting purposes and expects to prepare the company’s first set of financial statements on December 31, 2017. The company’s initial chart of accounts follows.

Required:

1. Prepare journal entries to record each of the above transactions for Business Solutions.
2. Prepare ledger accounts (in balance column format) and post the journal entries from requirement 1 to them.
3. Prepare a trial balance as of the end of November.

Mr. and Mrs. Evans are an African American couple who retired from the school system last year. Both are 65 years of age and reside on 20 acres of land in a large rural community approximately 5 miles from a Superfundsite and 20 miles from two chemical plants. Their household consists of their two daughters, Anna, aged 40 years, and Dorothy, aged 42 years; their grandchildren, aged 25, 20, 19, and 18; and their 2-year-old great-grandson. Anna and Dorothy and their children all attended the university.

Mr. Evans’s mother and three of his nieces and nephews live next door. Mr. Evans’s mother has brothers, sisters, other sons and daughters, grandchildren, and great-grandchildren who live across the road on 10 acres of land. Other immediate and extended family live on the 80 acres adjacent to Mr. Evans’s mother. All members of the Evans family own the land on which they live. Mrs. Evans has siblings and extended family living on 70 acres of land adjacent to Mr. Evans’s family, who live across the road. Mr. and Mrs. Evans also have family living in Chicago, Detroit, New York, San Francisco, and Houston. Once a year, the families come together for a reunion. Every other month, local family members come together for a social hour. The family believes in strict discipline with lots of love. It is common to see adult members of the family discipline the younger children, regardless of who the parents are.

Mr. Evans has hypertension and diabetes. Mrs. Evans has hypertension. Both are on medication. Their daughter Dorothy is bipolar and is on medication. Within the last 5 years, Mr. Evans has had several relatives diagnosed with lung cancer and colon cancer. One of his maternal uncles died last year from lung cancer. Mrs. Evans has indicated on her driver’s license that she is an organ donor.

Sources of income for Mr. and Mrs. Evans are their pensions from the school system and Social Security. Dorothy receives SSI because she is unable to work any longer. Mr. Evans and his brothers must assume responsibility for their mother’s medical bills and medication. Although she has Medicare parts A and B, many of her expenses are not covered. Mr. and Mrs. Evans, all members of their household, and all other extended family in the community attend a large Baptist church in the city. Several family members, including Mr. and Mrs. Evans, sing in the choir, are members of the usher board, teach Bible classes, and do community ministry.

Study Questions

1. Describe the organizational structure of this family and identify strengths and limitations of this family structure.

2. Describe and give examples of what you believe to be the family’s values about education.

3. Discuss this family’s views about child rearing.

4. Discuss the role that spirituality plays in this family.

5. Identify two religious or spiritual practices in which members of the Evans family may engage for treating hypertension, diabetes, and mental illness.

6. Identify and discuss cultural views that Dorothy and her parents may have about mental illness and medication.

7. To what extent are members of the Evans family at risk for illnesses associated with environmental hazards?

8. Susan has decided to become an organ donor. Describe how you think the Evans family will respond to her decision.

9. Discuss views that African Americans have about advanced directives.

10. Name two dietary health risks for African Americans.

11. Identify five characteristics specific to African Americans to consider when assessing the skin of African Americans.

12. Describe two taboo views that African Americans may have about pregnancy.