Emporia Middle School wants to raise money for a new sound system for its auditorium. The primary

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Emporia Middle School wants to raise money for a new sound system for its auditorium. The primary fund-raising event is a dance at which the famous disc jockey Obnoxious Ed will play classic and not-so-classic dance tunes. Tom Wickman, the music and theater instructor has been given the responsibility for coordinating the fund-raising efforts. This is Tom’s first experience with fund-raising. He decides to put the eighth-grade choir in charge of the event; he will be a relatively passive observer. Tom had 500 unnumbered tickets printed for the dance. He left the tickets in a box on his desk and told the choir students to take as many tickets as they thought they could sell for $5 each. In order to ensure that no extra tickets would be floating around, he told them to dispose of any unsold tickets. When the students received payment for the tickets, they were to bring the cash back to Tom, and he would put it in a locked box in his desk drawer. Some of the students were responsible for decorating the gymnasium for the dance. Tom gave each of them a key to the money box and told them that if they took money out to purchase materials, they should put a note in the box saying how much they took and what it was used for. After 2 weeks the money box appeared to be getting full, so Tom asked Luke Gilmor to count the money, prepare a deposit slip, and deposit the money in a bank account Tom had opened. The day of the dance, Tom wrote a check from the account to pay the DJ. Obnoxious Ed, however, said that he accepted only cash and did not give receipts. So Tom took $200 out of the cash box and gave it to Ed. At the dance Tom had Mel Harris working at the entrance to the gymnasium, collecting tickets from students and selling tickets to those who had not prepurchased them. Tom estimated that 400 students attended the dance. The following day Tom closed out the bank account, which had $250 in it, and gave that amount plus the $180 in the cash box to Principal Foran. Principal Foran seemed surprised that, after generating roughly $2,000 in sales, the dance netted only $430 in cash. Tom did not know how to respond.
Instructions
Identify as many internal control weaknesses as you can in this scenario, and suggest how each could be addressed.

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Accounting Principles

ISBN: 978-0470533475

9th Edition

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

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