o accounting for inventory. Below are a summary of the transactions for the year
ID: 2591158 • Letter: O
Question
o accounting for inventory. Below are a summary of the transactions for the year Price per Cumulative COGSEnding Jan 1 Begining Inventory 7,000 4.000 Units, Purchases · 7,000 (BEQ-Inventory $35,000 Feb Purchase $5.50 11000 $22,000 6,000 Mar Sale Apr Sale May Purchase (4.500) 8,000 $6.00 9,500 4,000 48,000 June Sale July Sale 3,500 5,00 1 700) 1 800 3,800 (4 800 21,000 August Purchase -$6.25 5,50031,250 3,800 2,000 5,800 Sept Sale Oct Sale Nov Purchase 10 500 11250 $6.25 23,750 Dec Sale Dec 31 $125,000|| 5375 250 B(2). The company currently uses FIFO to account for inventory. However, given the adjusted balance of cost of goods sold above and a computed balance of cost of goods sold under the LIFO method of $120,000, what would be the effect on the company's net income if LIFO was used to account for inventory? C. Silver Tone Partners, Inc. has a cash receipts clerk who will fill in for the receptionist on a regular basis. Normally the receptionist would collect the mail, which includes customer payments, and record the payments in the payments jourmal, as appropriate, and get the funds ready for deposit One week the receptionist was on vacation and the cash receipts clerk filled in at the front desk. The clerk didnt log any of the customer payments in the payments journal. The following week the receptionist returned from vacation. The next day numerous customers began to call the company stating that they received past due notices but their checks had already been cashed so they didn't understand. The cash receipts clerk quit without notice and no one understood what had occurred. Explain whether this situation posed an ethical issue and how it could expose the primary stakeholders of the companyExplanation / Answer
Ye, the situation given above posed a serious ethical issue since it is a basic concept in internal control of an organization, that the cashier cannot acts as a book keeper. There is a high risk for frauds to occur if the cashier and the book keeper is one and the same person since all the receipts and payments shall be in the control of the cashier and he can manupulate the books of accounts as he wishes. Similar situation has occured in the given case, since the receptionist is authorized to maintain the books of accounts, and in the absence of the receptionist, the cashier himself shall handle the books of accounts, therefore the is a high risk for frauds to occur. As expected the cashier has fled with the money of the customers without even recording the amount of receipts in the books.Therefore this involves a serious ethical issue to the organization.
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