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10 Mar 2019

I need to write an weekly accounting-internship report for myaccounting class (first week of internshp) which will answer thesetwo questions:

1) What you did this week and what you learned from it?

2) What problems/questions arise from doing work this week?

You can use below job duties and write a sample of short weeklyinternship-report.

-Shadowing members of the Accounting department as they performtheir duties.

-Assisting with research, filing, data entry, and recording andmaintaining accurate and complete financial records.

-Help with accounts receivable, payable and bank statementreconciliation

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Beverley Smith
Beverley SmithLv2
12 Mar 2019

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Ethics Case: Theft Reimbursement, Twice

I am the assistant controller at a medium-sized, not-for-profit organization. I hired a new accounts payable clerk three months ago—let’s call her Mary, which is not her real name—and then I fired her last week because she stole $16,583 from us by altering six checks. Mary’s primary duties were to key in all the accounts payable information, and then, after the checks were printed, to match all the supporting documentation to each check. She then took the checks to the signing officers. After they were signed, she mailed the checks and filed the yellow copy with all the supporting documentation in the paid invoices filing cabinet.

We pay each member of our board of directors a $2,000 honorarium. I prepare the list of the directors and how much to pay each director, which I give to Mary for inputting into the computer. Each honorarium check simply has the name of the director and no address or other information. We normally hand them to the directors during the meeting. Similarly, our expense report reimbursement checks only have the names of the individuals and no address or other information on the checks. We send those to our employees through the interoffice mail.

Well, after they were signed, Mary took four honorarium checks and two expense report checks, and changed the names on the checks to her name. All of our checks are printed on light green paper. Well, Mary used White-Out to alter the names, but she wasn’t very smart. It was obvious that the names had been changed from the White-Out used and her name wasn’t even the same font as the typing on the rest of the check. She took the checks across the street to an ATM machine and deposited them into her bank account. She then transferred the money to her family who live in another country.

I discovered the false checks last week when I was doing the bank reconciliation. She admitted what she did and we’ve had the police charge her with theft. Our bank was very apologetic and immediately reimbursed us the full $16,583. Our bankers admitted that the checks were so obviously falsified that they never should have cleared the bank in the first place.

Well, my problem is that, after I discovered the theft and before the bank reimbursed us, I decided to claim on our insurance policies. One of those policies is a check-protector service. Well, today we received a check for $16,583 from them. So, I took the check to my boss, the controller, and I was laughing saying that we’ve been reimbursed twice and that I was going to send the check back to the insurance company. Well, he said “No.” He told me to deposit the check into a high-interest savings account. “We’ll return the $16,583 to the insurance company after the court case is settled. In the meantime we’ll earn interest on the money and since we’re a nonprofit organization we won’t even have to pay tax on the interest.”

He said the interest represents the aggravation we’re going through. Well, there has been a lot of aggravation. The other accounting clerks felt terrible about Mary. They felt violated and abused because they had trusted her. We will also have to spend a lot of time with the lawyers and time in court at Mary’s trial. My boss’ attitude is that the interest on the extra $16,583 will cover all of these additional costs associated with the Mary fiasco. He also said that the bank deserves to pay the interest to us since they should never have cashed those doctored checks in the first place.

Well, I don’t think that this is right. But I don’t want to challenge him since I was the one who hired Mary. So, like, what do you think I should do?

Questions

1. What advice would you give to the controller?

2. What preventive and detective controls can be put in place to prevent this from happening again?

Company Background & Scenario
The Auto Zone Company is a well-established, publicly-held corporation, operating as a wholesaler in the auto parts industry. Specifically, Auto Zone purchases auto parts from manufacturers and sells them to large business customers. Most purchases and sales are on account, with trade credit terms (specified below).
You’re a Davenport University student pursuing a bachelor’s degree in business and employed at the Auto Zone Company this semester as an intern. You’ve worked in various departments and on several projects so far, learning a lot about the company’s business operations. Management seems impressed with your enthusiasm and the quality of your work.
The company’s accountant has just been called away for a family emergency and will likely be absent for a month or so. The General Manager asks you to take over the accountant’s regular duties on an interim basis. You’re nervous about doing so, but are confident that what you’ve learned in accounting class, plus your personal problem-solving skills, will make this a successful experience. What a great learning opportunity, not to mention an enhancement to your resume!
Part I
Journal Entries
a. Within the "Transactions" worksheet you will find journal entry statements. Use those statements to write the corresponding journal entries. You are to write the journal entries in the proper special journal. The special journals included within this workbook include the Sales Journal, Purchases Journal, Cash Receipts Journal and Cash Payments Journal. Any transaction that does natually work within one of the special journals should be written into the General Journal.
b.Within the "Transactions" worksheet you will find journal entry statements. At the end of this list you will find "adjusting" information. Use this "adjusting" information to write the respective adjusting journal entries. Write all adjusting entries in the worksheet labled "General Journal ADJ".
c. Before starting work, review the entire project: all instructions, business transactions descriptions, workbook sections, check figures, due dates, and submission requirements.
Credit Terms & Inventory Accounting
a. When Auto Zone purchases merchandise from a supplier or vendor on account, they receive credit terms of 2/15, net 30.
b. When Auto Zone sells merchandise to a customer on account, they offer that customer credit terms of 2/30, net 45.
c. Auto Zone uses a perpetual inventory accounting system and a last-in, first-out (LIFO) inventory costing method. Within this workbook there is a worksheet labeled "Inventory Control". You will need to use the "Inventory Control" worksheet to keep a perptual record of your inventory. As part of that process you will be calculating the value of CGS each time you generate a sale. Use the "Inventory Control" worksheet to calcluate your Cost of Goods Sold values.

d. Auto Zone uses the "Gross" method of accounting for purchases and sales. The "Net" method assumes that discounts are taken at the point of sale or purchase.

MAY JOURNAL TRANSACTIONS
May 1 Paid $2,100 to LG for utilities bill that was recorded in April as an Account Payable, Check #1000.
May 1 Purchased 3,000 GPS units on Credit from Yamaha for $35.00 per unit.
May 1 Purchases office supplies from Staples on credit for $1,800
May 1 Signed a one-year 15%, $150,000 note payable with Chase Bank.
May 2 Rented part of the warehouse to a new tenant and received $12,000 for three months rent (May, June, July).
May 2 Sold 2,000 Aux Cords on account to Tesla for $85 per units, Invoice #2000.
May 2 Sold 400 USB Ports for $70 per unit and 1,200 GPS units for $75 per unit on account to Dodge, Invoice #2001.
May 3 Received a bill from the law firm of Davenport Associates for $6,300, payable upon receipt, for bond consulting fees, Check #1001.
May 4 Sold 500 Aux Cords on credit to Buick for $77 per unit, Invoice #2002.
May 4 Purchased 2,100 USB Ports on credit from Shure for $45 per unit.
May 5 Paid for office supplies purchased at Staples on May 1st, Check #1002.
May 7 Sold 200 GPS units on account to Chevrolet for $49 per unit, Invoice #2003.
May 8 Issued 4,750 shares of common stock for $13 per share
May 11 Purchased 1,875 GPS units on credit from Sony for $25 per unit.
May 11 The Board of Directors declared a cash dividend of $7 per share for shareholders of record on May 13th, payable on May 17th.
May 12 Paid in full for the May 1 purchase from Yamaha, Check #1003.
May 13 Received and paid expense reports for travel and entertainment totaling $1,500, Check #1004.
May 13 Took advantage of a special deal to purchase 1,500 Aux Cords on account from Panasonic for $42 per unit.
May 15 Received payment in full from Tesla for the May 2nd sale.
May 15 Sold 1,050 USB Ports on credit to Chevrolet for $57 per unit, Invoice #2004.
May 16 Received payment from Buick for $125,000 of the $300,000 owed from April 5.
May 17 Paid the dividend that was declared on May 11th, Check #1005.
May 17 Check # 1006 was issued for payroll: $14,900 for salaries and $5,100 for wages.
May 20 Issued a credit to Chevrolet for the return of 150 defective units from the May 7th sale. These units has a cost basis of $35 per unit.
May 20 Returned the 150 defective units received from Chevrolet to Yamaha.
May 22 Purchased a $500 international phone card for one of the sales representative's upcoming European business trip, Check #1008.
May 23 Issued bonds payable at face value for $420,000
May 23 Purchased 2,080 USB Ports from Shure for $41 per unit paying in cash, Check #1009
May 24 Check #1010 was issued for payroll: $14,900 for salaries and $5,100 for wages.
May 25 Hired and paid a consultant $50,000 to devise a marketing plan. Auto Zone's management felt this was necessary to develop brand awareness. Check #1011.
May 26 While inspecting the May 11th purchase, it was discovered that the GPS units were programmed for Asia instead of North America. Auto Zone returned the entire order to Sony.
May 27 A bankruptcy judge disallowed Auto Zone's claim for $25,000 due from Jeep. Management Decided to write off this accounts receivable.
May 27 Sold 500 USB Ports on credit to GMC for $61 per unit, Invoice #2005.
May 29 Paid in full for the purchase from Panasonic on May 13, Check #1012.
May 29 Received payment in full from GMC for the May 27th transaction.
May 30 Auto Zone is behind in its mortgage payments to Fifth Third Bank. Paid a total of $20,000 ($5,000 principal and $15,000 interest), Check #1013.
May 31 Paid the first month's principal payment of $12,500 on the note payable. In addition, paid one month's interest, Check #1007
*All purchases on account terms of 2/15, n/30
**All credit sales have terms of 2/30, n/45
May Month-end Adjustments:
( A ) The Company took a physical count of Office Supplies on May 30 and found the following the value of inventory on hand to be $2,500. The beginning inventory was $3,200. Write the adjusting journal entry.
( B ) Auto Zone estimates bad debt expense on a monthly basis rather than waiting until year-end. The company uses the allowance method. Based on recent industry estimates, Auto Zone estimates that the allowance account should be 7.5% of accounts receivable. The ending AR balance is $850,000. At the end of the month (prior to this journal entry) there is a CREDIT balance of $19,000 in the Allowance for Doubtful Accounts account. Write the necessary adjusting entry.
( C ) The Balance of $23,000 in the prepaid insurance account at the beginning of May represents 5 months of coverage. Record the amount of insurance for May.
( D ) The Company took a physical inventory count on May 30 and found the following inventory on hand to be $100,641. The ending balance in the Inventory account (before this adjusting entry) was $128,947. Write the necessary adjusting entry.
( E ) Auto Zone has earned two months of the prepaid rent received from their tenant at the beginning of May.
( F ) Depreciation on the company's fixed assets for the month of May is as follows:
1. The furniture and equipment for the office was purchased last year for $7,350. these assets have a 5 year life, an expected salvage value of $500, and are depreicated using straight-line method.

2. The furniture and equipment for the warehouse was purchased a few years ago for $30,000. These assets have a 8-year life, an expected salvage value of $5,000, and are depreciated using the straight-line method.

Shoe: GPS
Beginning Inventory (BI) Purchases Sales Ending Inventory (EI)
Date BI Units BI $/Unit BI $ Purch Units Purch $/Unit Purch $ Sale Units (CGS) Sale $/Unit (CGS) Sale $ (CGS) EI Units EI $/Unit EI $
1-May 3300 $35.00 $115,500.00 $- $- $115,500.00
Shoe: Aux Cord
Beginning Inventory (BI) Purchases Sales Ending Inventory (EI)
Date BI Units BI $/Unit BI $ Purch Units Purch $/Unit Purch $ Sale Units (CGS) Sale $/Unit (CGS) Sale $ (CGS) EI Units EI $/Unit EI $
1-May 2500 $65.00 $162,500.00 $- $- $162,500.00
Shoe: USB Port
Beginning Inventory (BI) Purchases Sales Ending Inventory (EI)
Date BI Units BI $/Unit BI $ Purch Units Purch $/Unit Purch $ Sale Units (CGS) Sale $/Unit (CGS) Sale $ (CGS) EI Units EI $/Unit EI $
1-May 1400 $40.00 $56,000.00 $- $56,000.00

Robatelli's Pizzeria Case StudyIntroduction On the morning of October 31st, Elaine Black, Chief Information Officer at Robatelli's Pizzeria, was waiting for both Jim Saxton, database administrator, and Peter Greyton, operations manager, to come to her office for a meeting. While waiting, Elaine was thinking about the surge of telephone and Internet orders expected to be received through the company's customer order center within the next 12 hours. Halloween had always been the most popular day of the year for people in the greater Pittsburgh area to order pizza from Robatelli's. There were 53 restaurant locations to serve these customers, but only one location to receive all of the orders and forward them to the right restaurant. Elaine's thoughts were interrupted as Jim and Peter entered her office. The following conversation took place: ELAINE Well, guys, it's here again, our biggest day of the year. Not only is Halloween a busy day, but we have the upcoming day after Thanksgiving, the week before Christmas, and Super Bowl Sunday. Can our current computer system's infrastructure and people keep pace with the orders we expect? JIM I think our systems are all running at peak performance. We shouldn't have any computer concerns for today or those other busy days. PETER Everyone in the customer order center is focused on making sure that our customers get their pizzas as ordered. We have plenty of people scheduled to work tonight, so we're good to go. ELAINE Terrific. But every time we face one of these peak sales days, I start wondering about the long-term capacity and effectiveness of our computer systems. Jim, we need to think long term about our computer system. I was just reading an article that I'd like you to take a look at. It's about Anheuser-Busch Companies and their use of data mining. JIM I do agree with you, Elaine; we should always be thinking about how newer IT systems can help us. Could you e-mail me the link to the article? ELAINE Sure, and I would like you to think about how we might use the same approach in our business. Peter, your order center people are doing a great job, but again there's something I'd like us to think about in the long run. As you know, we now have to manually enter all customer order center sales and store sales into our general ledger (GL). I think we could improve a lot of things if those sales are automatically fed into our GL software. Why don't you think about any advantages you see for an automatic interface, and we'll look at the costs compared to those advantages. How's that sound? PETER I'll do that. I'll give it some thought and work on a report about an automatic interface between our GL software and the point of sale systems in our restaurants as well as the phone and Internet sales. How soon do you want to meet again to look at these issues? ELAINE Let's say, in two weeks at the same time. As Jim and Peter left her office, Elaine continued to think about the features of the company's accounting information systems and whether or not data extracted from these systems could facilitate the multiple needs of the company. The focus had always been on providing accurate financial accounting information from the various locations; however, the company's aggressive growth strategies meant increased emphasis on the system's ability to analyze detailed customer information that could be translated into increased sales opportunities. Elaine knew the challenges they faced could very well affect the company's ability to maintain its competitive advantage. She realized that her department must continually improve the company's information systems to help it achieve growth strategies. Operating state-of-the-art systems was imperative to position the company to execute those growth plans. However, she was concerned about the possibility that restrictions of the current information systems could actually prevent the company from doing what it wanted to do. Allowing restrictive systems to prevent them from achieving business strategies was a risk that Elaine would not tolerate!

Review the Robatelli's Pizzeria Case Study.

Develop an internal controls system in Robatelli's Pizzeria sales and cash business areas.

Prepare a 12- to 16-slide presentation describing the typical activities and outlining an effective system of internal controls for the Sales, Sales Returns, and Cash Collections business areas. Include any associated risks in these areas.

Describe specific internal controls that include authorization of transactions, segregation of duties, adequate records and documentation, security of assets, and independent checks and reconciliation for each business area.

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