Ted Jones owns rental properties in Texas. Each property has a property manager, who collects the rent once per month, arranges
for repairs to the property; and assists with advertising of other available properties. The property manager initiates a monthly transfer of cash to Jones each month, and prepares the bank reconciliation themselves. The property manager, however, has been slowly stealing money from the company. To cover their tracks, the amount of checks outstanding is underestimated on the bank reconciliation each month. Because of this, each monthly bank reconciliation appears to be out of balance; while the balance sheet reports more cash than is in the bank. Meanwhile, Ted Jones is in the process of trying to sell his property management company; therefore, the balance sheet must be presented to potential investors Respond to the questions below: a. What is the purpose of a bank reconciliation?
b. What type of internal controls must be put in place to avoid this type of theft?
c. How may the incorrect balance sheet adversely affect the sale of the business?
d. In other words, how might this error harm Jones and the potential investors?
1) The purpose of a bank reconciliation to compare the company's records to those of that of the Bank Statement, to see if there are any kind of difference between these two sets of records for ther cash transactions. The bank reconciliation process requires comparing the bank statement with Cash book records towards withdrawals, check payments, direct deposits received by bank, direct payments/charges by bank, cash deposits and financial transfers.
2) To avoid the theft of cash, the internal controls requires a through checks of the receipt and payments in the cash book must be compared with the cash receipts and cash payments by the bank in their bank statement.
3) The misappropriation of cash and showing the outstanding checks at the lower level will indicate that the cash generation by the property is less. It will disturb the valuation of the property by the potential investors through the cash generation method, which will result in loss / harm to Jones.
4. Maintain; Defaults, Inventory Items, record inventory information.
Explanation:
The question, in my understanding, is referring to master data of inventory items. Most enterprise inventory systems maintain attributes/information about a specific inventory item in a master table so that this record (and all other default info saved against it) can be pulled up and used in transactions as needed. Answers 1-3 are all pertaining to transactions and not maintenance information.
<em>The Dividend Valuation Model(DVM) is a technique used to value the worth of an asset. According to this model, the value of an asset is the sum of the present values of the future cash flows would that arise from the asset discounted at the required rate of return. </em>
If dividend is expected to grow at a given rate , the value of a share is calculated using the formula below:
Price of stock=Do (1+g)/(k-g)
Do - dividend in the following year, K- requited rate of return , g- growth rate
I believe that Anna has just encountered a glass ceiling. This means that Anna has encountered a barrier that her from rising to the level of management committee through promotion simply because she is a woman.This term is extended to refer to the obstacles that hinder the advancement of minority women. It is often difficult for minority women to rise to ranks simply because of their responsibilities, color and discrimination. In this case, Anna being a good mother to her children makes the management think that she wont want more responsibilities.
