College Accounting (Book Only): A Career Approach
13th Edition
ISBN: 9781337280570
Author: Scott, Cathy J.
Publisher: South-Western College Pub
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Textbook Question
Chapter 1, Problem 1PA
On June 1 of this year, J. Larkin, Optometrist, established the Larkin Eye Clinic. The clinic’s account names are presented below. Transactions completed during the month follow.
- a. Larkin deposited $25,000 in a bank account in the name of the business.
- b. Paid the office rent for the month, $950, Ck. No. 1001.
- c. Bought supplies for cash, $357, Ck. No. 1002.
- d. Bought office equipment on account from NYC Office Equipment Store, $8,956.
- e. Bought a computer from Warden’s Office Outfitters, $1,636, paying $750 in cash and placing the balance on account, Ck. No. 1003.
- f. f. Sold professional services for cash, $3,482.
- g. Paid on account to Warden’s Office Outfitters, $886, Ck. No. 1004.
- h. Received and paid the bill for utilities, $382, Ck. No. 1005.
- i. Paid the salary of the assistant, $1,050, Ck. No. 1006.
- j. Sold professional services for cash, $3,295.
- k. Larkin withdrew cash for personal use, $1,250, Ck. No. 1007.
Required
- 1. Record the transactions and the balance after each transaction.
- 2. Total the left side of the
accounting equation (left side of the equal sign), then total the right side of the accounting equation (right side of the equal sign). If the two totals are not equal, check the addition and subtraction. If you still cannot find the error, re-analyze each transaction.
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Lena, Carrie, and Margaret work for a family physician. The doctor is knowledgeable about office management practices and has segregated the cash receipt duties as follows: Lena opens the mail and prepares a triplicate list of money received. Lena sends one copy of the list to Carrie, the cashier, who deposits the receipts daily in the bank. Margaret, the recordkeeper, receives a copy of the list and posts payments to the patients' accounts. About once a month, the office clerks have an expensive lunch they pay for as follows. First Carrie endorses a patient's check in the doctor's name and cashes it at the bank. Lena then destroys the remittance advice accompanying the check. Finally, Margaret posts payment to the customer's account as a miscellaneous credit. The three justify their actions by their relatively low pay and knowledge that the doctor will likely never miss the money. What went wrong with the doctor's internal controls?
Lena, Carrie, and Margaret work for a family physician. The doctor is knowledgeable about office management practices and has segregated the cash receipt duties as follows: Lena opens the mail and prepares a triplicate list of money received. Lena sends one copy of the list to Carrie, the cashier, who deposits the receipts daily in the bank. Margaret, the recordkeeper, receives a copy of the list and posts payments to the patients' accounts. About once a month, the office clerks have an expensive lunch they pay for as follows. First Carrie endorses a patient's check in the doctor's name and cashes it at the bank. Lena then destroys the remittance advice accompanying the check. Finally, Margaret posts payment to the customer's account as a miscellaneous credit. The three justify their actions by their relatively low pay and knowledge that the doctor will likely never miss the money.
Would a bank reconciliation uncover this office fraud?
Consider each of the transaction below independently. All expenditures were made in cash
In march, the Cleanway Laundromat bought equipment. Cleanway paid $5,000 down and signed a noninterest-bearing note requiring the payment of $30,000 in nine months. The cash price for the equipment was $34,000.
Prepare all necessary journal entries to record each the transaction. Use this format:
Date
Account Titles
DR
CR
Chapter 1 Solutions
College Accounting (Book Only): A Career Approach
Ch. 1 - Prob. 1QYCh. 1 - Prob. 2QYCh. 1 - Which of the following accounts would increase...Ch. 1 - Which of the following statements is true? a....Ch. 1 - M. Parish purchased supplies on credit. What is...Ch. 1 - Define assets, liabilities, owners equity,...Ch. 1 - Prob. 2DQCh. 1 - How do Accounts Payable and Accounts Receivable...Ch. 1 - Describe two ways to increase owners equity and...Ch. 1 - What is the effect on the fundamental accounting...
Ch. 1 - When an owner withdraws cash or goods from the...Ch. 1 - Define chart of accounts and identify the...Ch. 1 - What account titles would you suggest for the...Ch. 1 - Prob. 1ECh. 1 - Determine the following amounts: a. The amount of...Ch. 1 - Dr. L. M. Patton is an ophthalmologist. As of...Ch. 1 - Describe a business transaction that will do the...Ch. 1 - Describe a transaction that resulted in each of...Ch. 1 - Label each of the following accounts as asset (A),...Ch. 1 - Describe a transaction that resulted in the...Ch. 1 - Describe the transactions that are recorded in the...Ch. 1 - On June 1 of this year, J. Larkin, Optometrist,...Ch. 1 - On July 1 of this year, R. Green established the...Ch. 1 - S. Davis, a graphic artist, opened a studio for...Ch. 1 - On March 1 of this year, B. Gervais established...Ch. 1 - In April, J. Rodriguez established an apartment...Ch. 1 - In July of this year, M. Wallace established a...Ch. 1 - In March, K. Haas, M.D., established the Haas...Ch. 1 - P. Schwartz, Attorney at Law, opened his office on...Ch. 1 - In March, T. Carter established Carter Delivery...Ch. 1 - In October, A. Nguyen established an apartment...Ch. 1 - Why Does It Matter? MACS CUSTOM CATERING, Eugene,...Ch. 1 - What Would You Say? A friend of yours wants to...Ch. 1 - Prob. 3A
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