Accounts Receivable and Internal Control
Assignment
Please note you have three assignments for this week. The case study, the weekly assignment and continue working on the final draft for the individual research project.
Case Study (Knapp book):
Dollar General Stores
Questions 1-4
Weekly Assignment:
Textbook (Boynton book): Complete and submit the following questions for grading:
14-26
14-28
15-23
15-27
16-24
16-33
14-26 (Analytical procedures) the following data was taken from the production and account ing records for Casuccio Manufacturing, Inc. Unaudited 20X9
Audited 20X8
Audited 20X7
Operating Data
Capacity in Units
450,000
450,000
450,000
Production in Units
450,000
400,000
300,000
Inventory in Units
32,000
28,000
21,000
Financial Data ($000)
Total Revenues
35,200
27,500
21,200
Total Assets
23,000
19,500
15,700
Accounts Receivable, Net
5,900
4,300
3,900
Bad Debt Expense
175
135
105
Accounts Receivable Written Off
165
125
100
Required
1. Calculate the following ratios for 20x9, 20x8 and 20x7:
a. Sales to total assets b. Sales to production
c. Revenue per unit sold
d. Accounts receivable growth to sales growth
e. Uncollectable accounts expense to net credit sales
f. Uncollectable accounts expense to accounts receivable written off g. Accounts receivable turn days
2. a. Describe the implications of the resulting ratios for the auditor's audit strategy for year 20x9.
b. What specific audit objectives are likely to be misstated?
c. How should the auditor respond in terms of potential audit tests?
14-28 (Controls over cash receipts processing at a church) You have been asked by the board of trustees of a local church to review its accounting procedures. As a part of this review, you have prepared the following comments relating to the collections made at weekly services and recordkeeping for members’ contributions:
1. The church’s board of trustees has delegated responsibility for financial management and audit of the financial records to the finance committee. This group prepares the
Please note you have three assignments for this week. The case study, the weekly assignment and continue working on the final draft for the individual research project.
Case Study (Knapp book):
Dollar General Stores
Questions 1-4
Weekly Assignment:
Textbook (Boynton book): Complete and submit the following questions for grading:
14-26
14-28
15-23
15-27
16-24
16-33
14-26 (Analytical procedures) the following data was taken from the production and account ing records for Casuccio Manufacturing, Inc. Unaudited 20X9
Audited 20X8
Audited 20X7
Operating Data
Capacity in Units
450,000
450,000
450,000
Production in Units
450,000
400,000
300,000
Inventory in Units
32,000
28,000
21,000
Financial Data ($000)
Total Revenues
35,200
27,500
21,200
Total Assets
23,000
19,500
15,700
Accounts Receivable, Net
5,900
4,300
3,900
Bad Debt Expense
175
135
105
Accounts Receivable Written Off
165
125
100
Required
1. Calculate the following ratios for 20x9, 20x8 and 20x7:
a. Sales to total assets b. Sales to production
c. Revenue per unit sold
d. Accounts receivable growth to sales growth
e. Uncollectable accounts expense to net credit sales
f. Uncollectable accounts expense to accounts receivable written off g. Accounts receivable turn days
2. a. Describe the implications of the resulting ratios for the auditor's audit strategy for year 20x9.
b. What specific audit objectives are likely to be misstated?
c. How should the auditor respond in terms of potential audit tests?
14-28 (Controls over cash receipts processing at a church) You have been asked by the board of trustees of a local church to review its accounting procedures. As a part of this review, you have prepared the following comments relating to the collections made at weekly services and recordkeeping for members’ contributions:
1. The church’s board of trustees has delegated responsibility for financial management and audit of the financial records to the finance committee. This group prepares the