Question: Could y'all explain the answer not just answer it please! Partners Breslin and Crane have a coin-operated laundry business in a retail shopping center, BB

Could y'all explain the answer not just answer it please!

Could y'all explain the answer not just answer it please! Partners Breslin

Partners Breslin and Crane have a coin-operated laundry business in a retail shopping center, BB Laundry. The business has operated for several years with the partners sharing income equally. They employ two part-time workers. The part-time employees work alternating shifts and are only there if either Breslin or Crane is present. The laundry business is primarily a cash business. On alternate days each partner empties the coins from the laundromat's machines and deposits them in the bank. The business was generating a healthy cash flow for several years. However, in the last 18 months, cash flow declined precipitously. Crane believes that the decline in cash is a result of collusion between the two part-time workers. Crane assumes that the workers are somehow rigging the machines and requiring the customers to pay them directly. When Crane shares these concerns with Breslin, Breslin assures Crane that the part-time workers are not stealing money. Breslin has been pocketing cash because of some personal financial problems related to a messy divorce and several failed investments. Breslin is urging Crane to sell out and liquidate their partnership. Breslin believes that upon liquidation there will have enough cash to overcome the personal financial crisis and repay the cash that has been taken from the business. Crane is not aware of Breslin's financial problems. The following trial balance is prepared by the partners' accountant. In addition, the partnership has a contractual lease on the building where the laundromat is located. The lease expires five years from now. The monthly payments of $500 are consistently made on time and recorded as part of operating expense. If the lease is terminated early, the lessor requires a $2,000 payment for early lease termination. Required: 1. Identify the weakness in the partnership's internal control which could produce the pattern of declining cash flows. How could the partnership correct the internal control weakness? Explain. 2. Do you think fraud has occurred? Or an ethical breach? Explain. Partners Breslin and Crane have a coin-operated laundry business in a retail shopping center, BB Laundry. The business has operated for several years with the partners sharing income equally. They employ two part-time workers. The part-time employees work alternating shifts and are only there if either Breslin or Crane is present. The laundry business is primarily a cash business. On alternate days each partner empties the coins from the laundromat's machines and deposits them in the bank. The business was generating a healthy cash flow for several years. However, in the last 18 months, cash flow declined precipitously. Crane believes that the decline in cash is a result of collusion between the two part-time workers. Crane assumes that the workers are somehow rigging the machines and requiring the customers to pay them directly. When Crane shares these concerns with Breslin, Breslin assures Crane that the part-time workers are not stealing money. Breslin has been pocketing cash because of some personal financial problems related to a messy divorce and several failed investments. Breslin is urging Crane to sell out and liquidate their partnership. Breslin believes that upon liquidation there will have enough cash to overcome the personal financial crisis and repay the cash that has been taken from the business. Crane is not aware of Breslin's financial problems. The following trial balance is prepared by the partners' accountant. In addition, the partnership has a contractual lease on the building where the laundromat is located. The lease expires five years from now. The monthly payments of $500 are consistently made on time and recorded as part of operating expense. If the lease is terminated early, the lessor requires a $2,000 payment for early lease termination. Required: 1. Identify the weakness in the partnership's internal control which could produce the pattern of declining cash flows. How could the partnership correct the internal control weakness? Explain. 2. Do you think fraud has occurred? Or an ethical breach? Explain

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