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vitfil [10]
3 years ago
6

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?
Business
1 answer:
Anarel [89]3 years ago
7 0

Answer:

Answers explained below

Explanation:

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.

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wolverine [178]

Answer:

1-b

2-d

3-a

4-d

5-a

Explanation:

8 0
3 years ago
Why is it more difficult to get out of debt when only paying the minimum payment?
Artyom0805 [142]

When one keeps paying only the minimum amount, they will find getting out of debt harder because:

  • More interest will accrue on the balance left

When a person pays the minimum balance that they are supposed to pay on a loan, they will be leaving a larger portion of money to be paid back.

This amount will accumulate interest such that the debt will keep increasing because the interest needs to be paid back as well.

In order to get out of debt faster, it is recommended that you pay higher than the minimum because this would reduce the amount that interest is charged on which means that you would owe less interest.

In conclusion, paying the minimum balance leads to more interest accumulating which makes getting out of debt difficult.

<em>Find out more at brainly.com/question/13711677.</em>

7 0
2 years ago
At the beginning of 2016, Gannon Company received a three-year zero-interest-bearing $1,000 trade note. The market rate for equi
notka56 [123]

Answer:

d. Overstate, understate, understate, zero

Explanation:

The amount of earnings overall is the same. so, in the end, there is n difference in retained earnings.

But, on accrual accounting, the note should not enter the accounting as 1,000 as time value of money exist.

At 2016 the sales revenue should be the present value of 1,000 dollars not the complete 1,000 dollars. Thus, is overstated.

Then, the interest accrued from the note are not recognized. Thus, the first year (2016) recognize revenues that should be matched with 2017 and 2018

Thus, these two subsequent years ended understated.

6 0
3 years ago
During the recession of 2008 through 2010, Ford
mars1129 [50]

Answer:

During the recession of 2008 through 2010, Ford saw sales of its vehicles drop and was forced to reduce production. This decision reflected changes in the company's ECONOMIC environment.

Explanation:

The automotive industry crises occurred from 2008 to 2010, it was basically a part of the financial crisis that started in 2007. It also effected most of the Europe, but the results in America were far worst than any other part of the world. The main reason behind it was the rise in the fuel prices for these vehicles. As Ford didn't offer much fuel efficient models for costumers, their sales started to decline, which resulted in the reduction of production, and changed the companies economic environment.

3 0
3 years ago
Kijijo Auctions runs an online auction company. Its end-of-year financial statements indicate the following results. Total asset
katrin [286]

Answer:

40%

Explanation:

Total assets. $240,000

Less total liabilities ($130,000)

$110,000

Less common stock ($24,000)

Retained earnings at end $86,0000

Less Retained earnings at the beginning ($29,000)

Addition to retained earnings $57,000

Add dividends $6,400

Net profit earned $63,400

Add expenses $94,000

Revenue. $157,400

Therefore, company's net profit margin expressed as a percentage = Net profit earned / Revenue

= (63,400/157,400) × 100

= 40%

6 0
3 years ago
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