Answer:
Identification of the Internal Control Weaknesses:
A. There is no segregation of duties and there is lack of access control. Jerry Miller as a security guard is not expected to have a master key to the cash box. With this he can pilfer the cash. If he prepares the report that shows the number of cars that parked on the lot, he is not supposed to also prepare the day's cash receipts. Otherwise, he can state any number of cars as parked that he likes, and which corresponds to the cash he might leave in the Cash box since he also has a master key.
B. There is no segregation of duties and there is lack of supervision, proper reconciliations, and assets audit. Sharon Fisher handles purchase transactions from the beginning to the close all alone with a third party. This exposes the company to procurement frauds and collusion with suppliers. She can purchase assets for the company at prices that would enrich her personally.
C. Forming an audit opinion on the basis of ratio analysis of last year's comparative financial statements exposes the company to audit risks. While ratio analysis is part of the basis for forming audit opinions, it is surely not the first audit procedure to obtain audit evidence to support his audit opinion on the financial statements. An auditor is expected to obtain sufficient audit evidence and perform audit substantive tests of financial statement assertions. He or she is also expected to review the internal control system to ensure that it is operating effectively after establishing its existence and reviewing changes in internal controls.
Explanation:
Internal Controls are controls established by management in order to help it achieve business goals. There are many internal controls, including Separation of Duties, Access Controls
, Authorization and Approvals, Asset Audits, Reconciliations, and Data Backups. The purposes of internal controls are to establish the reliability of financial reporting, ensure timely feedback on the achievement of operational or strategic goals, and achieve compliance with financial management laws, and accounting regulations.
Answer:
Cash provided by operating activities $39,650
Explanation:
The computation of the cash provided by operating activities under the direct method is as follows:
Sales Revenue $30,600
Decrease in Account Receivable $4,600
Interest Revenue $5,600
Increase in Interest Receivable - $1,150
Cash provided by operating activities $39,650
We simply applied the above sequence so that the correct value could come
And, the same is to be considered
Answer:
Utilities
Explanation:
Variable costs are expenses that vary proportionately with the changes in production level. Should production level rise, variable costs increases. Variable costs form the majority of the direct cost of production.
Unlike fixed costs, the monthly bill for variable costs will keep fluctuating. In this scenario, utilities represent the variable cost. Expenses on electricity, water and other consumables will vary from time to time. With a high level of production, consumption of power and water will be high.
Rent and insurance cost will remain the same regardless of production level. A professional fee is an overhead expense. It is not an input in the production process.
Answer:
- <em><u>C. Drive at the posted speed limit</u></em>
Explanation:
The answer choices for this question are:
- A. Keep alert and watch out for construction barrels or cones
- B. Slow down even if you don't think you'll hit a road worker
- C. Drive at the posted speed limit
- D. Keep as much distance as you can while navigating around them
Since the conditions of the road are not the best, you should drive below the posted speed of limit.
The only presence of workers on the road represent a risk for them and for you.
The number of lanes are reduced, the road could present potholes, dirt, stones, or even some substances that make the pavement slippery. You could not have good visibility.
All those risks make that you have to be extremely careful, reduce your speed, lower than than the posted speed limit.
Thus, you should:
- A. Keep alert and watch out for construction barrels or cones
- B. Slow down even if you don't think you'll hit a road worker
- C. <u>NOT </u>drive at the posted speed limit
- D. Keep as much distance as you can while navigating around them
Answer:
14.35%
Explanation:
Simon Software Co
rs= 12%
D/E = 0.25
rRF= 6%
RPM= 5%
Tax rate = 40%.
We are going to find the firm’s current levered beta by using the CAPM formula which is :
rs = rRF+ RPM
12%= 6% + 5%
= 1.2
We are going to find the firm’s unlevered beta by using the Hamada equation:
=bU[1 + (1 −T)(D/E)]
Let plug in the formula
1.2= bU[1 + (0.6)(0.25)]
1.2=(1+0.15)
1.2= 1.15bU
1.2÷1.15
1.0435= bU
We are going to find the new levered beta not the new capital structure using the Hamada equation:
b= bU[1 + (1 −T)(D/E)]
Let plug in the formula
= 1.0435[1 + (0.6)(1)]
=1.0435(1+0.6)
=1.0435(1.6)
= 1.6696
Lastly we are going to find the firm’s new cost of equity given its new beta and the CAPM:
rs= rRF+ RPM(b)
Let plug in the formula
= 6% + 5%(1.6696)
= 14.35%
