Cripple Creek Company has one trusted employee, who, as the owner said, handles all of the
Question:
a. Cash sales sometimes were not entered in the cash register, and the trusted employee pocketed approximately $ 50 per month.
b. Cash taken from the cash register (and pocketed by the trusted employee) was replaced with expense memos with fictitious signatures (approximately $ 12 per day). Cripple Creek is open five days per week throughout the year.
c. A $ 300 collection on a trade receivable of a valued out- of- town customer was pocketed by the trusted employee and was covered by making a $ 300 entry as a debit to sales returns and a credit to trade receivables.
d. An $ 800 collection on a trade receivable from a local customer was pocketed by the trusted employee and was covered by making an $ 800 entry as a debit to allowance for doubtful accounts and a credit to trade receivables.
Required:
1. What was the approximate amount stolen during the past year?
2. What would be your recommendations to the owner about the company’s internal controls?
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Related Book For
Financial Accounting
ISBN: 978-1259103285
5th Canadian edition
Authors: Robert Libby, Patricia Libby, Daniel Short, George Kanaan, M
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