Part 1. Internal Controls List the 5 most widely accepted


Question Description:

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Part 1. Internal Controls List the 5 most widely accepted components of internal control. Then, in your own words, write 1-2 paragraphs describing the purpose of internal controls. Provide examples, as appropriate. Use this week’s content, readings, and your LIRN resources or the Internet, as needed, to support your answer. Part 2. Dardano Enterprises Bank Reconciliation The June 30 bank statement for Dardano Enterprises shows a balance of $79,310. Dardano Enterprises, however, shows a cash balance of $67,000. In addition, Dardano’s had the following information: 1.$4,500 in deposits made, but not appearing on the June 30 bank statement. 2.A $15,300 check written but not appearing on the June bank statement. 3.One check written for the purchase of Supplies erroneously recorded for $670 but appears on the bank statement as $760. 4.Monthly service charges listed on the banks statement are $275. Dardano has already recorded the effect of $175 of those charges. 5.A customer payment for a $1,700 receivable was collected by the bank but not yet recorded by Hayley. a.Prepare the bank reconciliation for Dardano Enterprises as of June 30. Enter your answers in the shaded areas of the bank reconciliation below. Dardano Enterprises Bank Reconciliation June 30 Balance per bank statement Add: Deposits in transit Deduct: Outstanding checks Actual cash balance Balance per company records Add: Collection of receivable Deduct: Error Service charges Actual cash balance b.Now prepare the necessary journal entries resulting from the reconciliation. Enter your answers in the shaded areas of the journal below. General Journal Date Account Names Debit Credit June 30 Cash Accounts Receivable To record collection of receivable by the bank June 30 Supplies Cash To record correction. June 30 Service Charge Expense Cash To record bank service charge. Part 3. Bixler Company’s Petty Cash Bixler Company establishes a petty cash fund for $250 on April 1. On April 30, the fund’s custodian prepares a report showing $165 in cash remaining and receipts of $17 for miscellaneous items, $35 for postage, and $32 for supplies. The custodian then gives the report to the accountant, who replenishes the fund. Prepare any necessary journal entries for the month of April. Hint: A journal entry is made to record the establishment of the fund. No entries are made as payments are made from the fund, but are made when the fund is replenished. Don’t forget to check for cash over or cash short before making the entries. Enter your answers in the shaded areas of the journal below. General Journal Date Account Names Debit Credit April 1 To record creation of petty cash fund. April 30 To record expenses and replenishment of petty cash fund. Part 4. Cash and Cash Equivalents Indicate, with a yes or no, whether the item listed would be reported as cash and cash equivalents. Enter your answer in the shaded box next to each. ITEM YES or NO? Commercial paper, maturing in 120 days Certificate of deposit, maturing in 45 days Cash on hand Undeposited checks from customers Common stock Commercial paper, maturing in 60 days Part 5. Bedford’s Cash and Cash Equivalents On December 31, 2012, Bedford Company has $25,000 of cash in a checking account. The company invested in the following items during November and December of 2012: November: One-month Treasury bills (T-bills) $10,000 Certificate of deposit, maturing 1/15/2014 30,000 Common Stock 55,000 Commercial paper, maturing 1/31/2013 60,000 December: 60-day Treasury bills $15,000 Certificate of deposit, maturing 2/15/2013 20,000 Preferred Stock 40,000 What is the total of cash and cash equivalents that should be reported on the December 31, 2012 balance sheet? Enter the items that should be included in the shaded areas below to determine the total. The first one has been done for you. HINT: Review each item to determine which ones are readily convertible into cash and have an original maturity of three months or less. Checking Account $25,0

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