Listed below five procedures followed Beat Company Financial information Blevins Inc. presented below Operating data Gallup Corporation

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E8-5
Listed below are five procedures followed by The Beat Company.
1. Several individuals operate the cash register using the same register drawer.
2. A monthly bank reconciliation is prepared by someone who has no other cash responsibilities.
3. Ellen May writes checks and also records cash payment journal entries.
4. One individual orders inventory, while a different individual authorizes payments.
5. Unnumbered sales invoices from credit sales are forwarded to the accounting department
every four weeks for recording.
Instructions
Indicate whether each procedure is an example of good internal control or of weak internal control.
If it is an example of good internal control, indicate which internal control principle is being followed. If it is an example of weak internal control, indicate which internal control principle is violated.

Use the table below.

Procedure IC Good or Weak? Related Internal Control

Principle
1.
2.
3.
4.
5.


E15-1
Financial information for Blevins Inc. is presented below.

December 31, 2009 December 31, 2008
Current assets $125,000 $100,000
Plant assets (net) 396,000 330,000
Current liabilities 91,000 70,000
Long-term liabilities 133,000 95,000
Common stock, $1 par 161,000 115,000
Retained earnings 136,000 150,000

Instructions Prepare a schedule showing a horizontal analysis for 2009 using 2008 as the base year.




E15-2
Operating data for Gallup Corporation are presented below.

2009 2008
Sales $750,000 $600,000
Cost of goods sold 465,000 390,000
Selling expenses 120,000 72,000
Administrative expenses 60,000 54,000
Income tax expense 33,000 24,000
Net income 72,000 60,000

Instructions
Prepare a schedule showing a vertical analysis for 2009 and 2008.
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