Account for short-term investments) Siegal Investments purchased Liner shares as a trading security on December 16 for $109, XXXXXXXXXXSuppose the Delmer shares decreased in value to $100,000 at...

SOLUTION
    DATE
    DESCRIPTION
    POST REF
    DEBIT $
    CREDIT $
     
     
     
     
     
     
    Dec
    31
    Unrealized Loss on trading securities
     
    9,000
     
     
     
     Valuation Allowance for Trading Securities
     
     
    9,000
     
     
     To record decrease in fair value of trading securities
     
     
     
    SIEGAL INVESTMENTS
     BALANCE SHEET (Selected)
    As on December 31,
     
     
     
    Cash
     
     
    Temporary Investments
    $109,000
     
    Less: Valuation allowance for trading investments
    $9,000
    $100,000
SOLUTION
Memorandum
To:
Zeke Pitt, Manage
From:
Manager - Customer Collections Department
Date;
26nd September 2012
Re:
Internal Control - Cash Collections
The internal control system for receiving the cheques / Cash and posting of customers accounts needs to be looked into. The same person opening the mails for receipt of checks and doing entry for customer accounts leads to a loose internal control. This may lead to a situation, where checks / cash received are misappropriated and entry for sale discounts are made to balance the customer’s ledger.
It is therefore recommended that the job of making entry in customer ledger for sales discount should be assigned to different executives. The procedure can be made as follows:
· Executive who opens the envelopes should prepare a list of checks received in triplicate. Original should be given to the executive who makes entries in the customer's account and duplicate should be handed over to the cashier, along with the checks to deposit the same in the bank. Triplicate should be retained by the receipt clerk for his records.
· Bank reconciliation must be ca
ied out on weekly basis by the cashier, and e
ors / return checks to be informed to customer accounts - executive and Sales manager.
· Sales accounts clerks must send customer accounts statement to all customers, and outstanding balance should be confirmed. Any discrepancy if pointed out by the customer should be immediately investigated and Sales Manager / Finance Manager to be informed.
· Co
ective action should be advised on such e
ors and any misappropriation if noticed, the concerned executive should be asked to leave immediately. There should be no place for any dishonest worker.
Thanks
SOLUTION
    DATE
    DESCRIPTION
    POST REF
    DEBIT $
    CREDIT $
     
     
     
     
     
     
     
    1
    Accounts receivable
     
    1,030,000
     
     
     
     Common Stock
     
     
    1,030,000
     
     
     
     
     
     
     
    2
    Cash
     
    895,000
     
     
     
    Accounts receivable
     
     
    895,000
     
     
     
     
     
     
     
    3
    Allowance for doubtful accounts
     
    15,000
     
     
     
    Accounts receivable
     
     
    15,000
     
     
     
     
     
     
     
    4
    Bad debt expense
     
    20,600
     
     
     
    Allowance for doubtful accounts
     
     
    20,600
SOLUTION
    DATE
    DESCRIPTION
    POST REF
    DEBIT $
    CREDIT $
     
     
     
     
     
     
     
    a
    Accounts receivable
     
    183,000
     
     
     
     Common Stock
     
     
    183,000
     
     
     
     
     
     
     
    B
    Cash
     
    133,000
     
     
     
    Accounts...