ACC201 homework

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due 10/18 5:00 pm

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HOMEWORK #5 Due October 19, 5pm 10 points Submit your answers to both parts of the assignment in a single Word document PART 1 The following information is available for a company as of January 1, 2018: Accounts Receivable Allowance for Doubtful Accounts Accounts Receivable (net) $235,000 (16,300) 218,700 The following events took place during 2018: 1. During the year, the company sold services for $450,000 cash and $2,100,000 on credit. 2. Accounts Receivable of $22,000 from prior years was determined to be uncollectible and was written off as a bad debt. 3. The company collected $1,950,000 of cash from accounts receivable. 4. On December 31, a decision was made to estimate bad debts as 4% of credit sales. Required A. Record the four events above that took place during 2018 in journal entry form. B. Determine the Accounts Receivable (net) amount as of December 31, 2018. Show your work. C. Determine the receivables turnover ratio for 2017 and 2018. Credit sales for 2017 amounted to $1,900,000 and Accounts Receivable (net) as of December 31, 2016 was $195,000. Based on the turnover ratio, which year did the firm better manage its Accounts Receivable? PART 2 On D2L there is a ten-minute podcast from This American Life related to inventory of a gift shop. Required Listen to the podcast. In the same Word document that you used to answer Part 1, complete each below with writing that is free of grammatical and spelling errors. A. Give a brief summary of the story in 5 to 10 complete sentences. B. Explain the main lesson in the story in 2 to 3 complete sentences. C. Explain in 2 to 4 sentences, why you think Professor Petroni asked you to listen to this story. Include what the story says about the demand for accounting. David Kestenbaum If the Obamas want to go out for a theater date or to the ballet or to hear Yo-Yo Ma, there is a place that has a special presidential box for them to sit in-- the Kennedy Center for the Performing Arts in Washington DC. Plush seats, soaring ceilings, all that stuff. But when my cousin Dan Weiss worked there in the 1970s, he spent a lot of time in the basement. He was a smart, idealistic kid, still in college. The basement is where the stockroom was for the gift shops upstairs. Dan Weiss When I started, I was basically a stock clerk. I would stock the gift shops each day with merchandise. And I ran up and down the stairs all day long-- up and down, up and down, up and down. David Kestenbaum That's a skill that was in demand at the gift shops, because the gift shops were staffed by volunteers, a lot of them retired. 300 volunteers. Dan Weiss All of our sales people were well-intentioned volunteers. Many of them simply wanted to be in the Kennedy Center to support the mission. David Kestenbaum So these are retired people who love the theater, or love opera, or love symphonies. Dan Weiss That's right. I would suspect in my experience that not a single one of them had had a retail job before they took this job. David Kestenbaum The gift shops-- there were two-- were run kind of like lemonade stands. They sold t-shirts, books, commemorative spoons, but no cash registers, no receipts, just a little cash box. The volunteers would come in whenever their schedules allowed. The Kennedy Center had just opened, and at the beginning, everything seemed sort of charmed. There weren't a lot of a rules. For instance, when Dan found a stray cat meowing and hungry, he kept it in the stock room with all the merchandise. The cat got kind of famous. Dan Weiss He lived down there and had the parade of visitors. Leonard Bernstein went in to pet him, and Mikhail Baryshnikov. David Kestenbaum The gift shops, I should explain, were not a small operation. They sold $400,000 worth of stuff a year. And while no one liked to talk about it, in these lovely gift shops, in this lovely building where the National Symphony played, something was seriously wrong. Dan Weiss The gift shop operation was clearly underperforming. There wasn't very much money making it to the bank, given all the merchandise that we were selling. And no one really understood why that was happening. David Kestenbaum The nice man running the gift shop at the time got fired. And Dan suddenly got a big promotion. At age 21, he became manager of gift shops at the Kennedy Center for the Performing Arts. His new job-- figure out where the money was disappearing to. Dan didn't have any business training. He'd majored in art history and psychology. Aside from a stint in high school at an ice cream parlor, this was his first real job, his first time seeing how business worked. But he's a pretty driven guy. And if you give him a task, he's going to sink his teeth in. And the first thing he did was a bit of math. Dan Weiss So I tried to figure that out-- how much money were we losing, how much merchandise were we losing? And in the retail sales business, they use a term called shrinkage. And that is the percentage of overall sales that you might be losing somehow-- merchandise, cash, who knows? And it was almost 40% when I took the job initially. That means that $0.40 on every dollar that was supposed to go into the bank-- we weren't sure where it was going, but it wasn't going into the bank. David Kestenbaum And what's a typical number out there in the world for small businesses? Dan Weiss Back in the day when I did this work in the 1970s, a big shrinkage number at Macy's or at some other store might be, probably 3%. David Kestenbaum And you were 40%. Dan Weiss We were big time. We were 40%. David Kestenbaum Somewhere there had to be a thief. Dan ran through the entire gift shop operation methodically, obsessively. And began to suspect one guy-- a younger guy in his 20s, one of the other paid employees who helped run the place. The guy's job was to transfer the money from the cash box to the safe at closing time. Dan's next move? Well, if you're the manager of a gift shop, stealing from the cash box is kind of a strange-sized problem to have. You don't call the FBI. Do you call the security guards? Do you call the police? It turns out, if you work at the Kennedy Center, there is someone special you call. Dan Weiss I had to engage the United States Park Police detective agents, who oversaw the Kennedy Center. Special investigative arm of the United States Park Service. David Kestenbaum Who knew they had one? Dan Weiss I didn't until that began. David Kestenbaum The Park Service assigned Dan a detective. Dan Weiss His name was Loveless. And I thought what a great name for a detective. He was actually quite charming. David Kestenbaum Detective Loveless had actually seen a lot in his time. And he was amused by the idea of a thief at a place known for opera, musicals, and ballet. But he gave the job his full attention. Told Dan, if you want to catch this guy we're going to have to plan out a sting operation. So after work one day, detective Loveless picked up Dan in an unmarked car and drove to a secret location. Dan Weiss Well, his favorite place to meet-- which was, I suppose if you're a policeman, a secret place, but it didn't seem so to me-- was he would pick me up on the street in Washington and drive over Memorial Bridge. And at the traffic circle on the other side of Memorial Bridge, right in front of Arlington Cemetery-- which is a highway-- he would drive up the curb and park his car right there, smack on the grass in the middle of the traffic circle on Memorial Bridge. And we would spend 20 minutes or a half an hour sitting there, probably seen by 25,000 people who drove by, in our secret place. But I guess he assumed if you're right out in the middle of everything, nobody notices you. David Kestenbaum One Friday night, they set the trap. Dan walks as nonchalantly as possible into the Kennedy Center gift shop, says hi to the volunteers like nothing's up at all, and puts some marked bills into the cash box. Then he walks outside to rejoin Detective Loveless, who's chosen the most cliched spot for the stakeout-- in the bushes. They hide in the bushes, on the other side of the road and peer across into the gift shop with binoculars. Dan Weiss I should tell you it was February and cold. It may have been the coldest day in the history of Washington. And there we were outside, shivering in the bushes, and he's looking through the binoculars. And he would tell me, "Somebody's coming to the gift shop. Let me get you to take a look at this. Tell me who this is. Who is this? Is this our guy? Is this our guy?" And he would hand me the binoculars. And I would look and I'd say, "No, that's not our guy. That's an 85-year-old woman, who's selling spoons to a customer." And he'd say, "All right. Just checking." And that's how it would go. Every time someone went near the gift shop, he would pass me the binoculars. And then at just about the exact time, the staff member showed up to close up the cash register. And he got very excited. He said, "He's here. He's here. Let's go." David Kestenbaum They intercept the guy on the way to his car. And find, yes, marked bills in his pocket. They put the guy in handcuffs and arrest him. And so, you might think, case closed. Right? But the amount of money they found on the thief, it wasn't that much. $60, just $60. In fact, when the case goes before a judge, the judge basically throws it out. All of which meant the problem Dan faced was much bigger. Remember, the amount of revenue they were missing each year was over $150,000. Dan, though, had another plan of attack-- a much more ordinary one. Paperwork. If the gift shop had been run like a lemonade stand, now he wants it to run like a lemonade factory. Dan sets up an inventory system. He posts price lists in the gift shop-- hats cost this much, t-shirts this much. Tells the retirees volunteering in the gift shop, "When you sell something, write it down." In other words, he basically reinvents on his own what any normal retail business would call record-keeping. And lo and behold, the leaking stops. The mysterious losses-- that 40% shrinkage-- began to steadily shrink. He got into Macy's territory, down to single digits. At the gift shop, Dan was a hero. But his victory meant something kind of unsettling. It meant the problem hadn't been a thief. It was lots of thieves. In fact, as best as Dan could figure in that sea of 300 volunteers, those elderly art lovers, a bunch of them were taking stuff. And the paid staff who worked in other parts of building, they were grabbing stuff too. Dan Weiss And people would walk by and pet the cat, and see merchandise and pick it up, because it was just stuff on a table, that people thought it was OK. David Kestenbaum And people weren't just grabbing t-shirts. Some had been taking cash-- mostly small amounts, like a cab fare home. After all, they'd just worked three hours for free. It's just a few dollars. What's the harm? But still, they put their hands in the cash box, took some bills out, and put the money in their pockets. Dan Weiss That's stealing. They were all stealing. David Kestenbaum There were retired volunteers there taking money out of the cash box? Dan Weiss There were some volunteers who were taking money. There were some young employees who were taking money. There were lots of people who were taking merchandise, at every level. People were all stealing from this wonderful, uplifting organization because they could. Because it was easy and it was available. David Kestenbaum If this population, these people, well-meaning, community-minded, classical music fans-- if some of them were stealing, it meant anyone would. For Dan, that was a sad thing. Dan Weiss And I guess that's the lesson I learned in 1979. We are going to take things from each other if we have a chance. I never understood that. It didn't feel OK to me then. It doesn't feel OK to me now. And it wasn't a terrifically optimistic lesson, that many people need there to be controls around them, for them to do the right thing. And if there aren't any controls around or any supervision, they may not do the right thing. David Kestenbaum Fresh out of college, working in a place where fancy people dress up every night, Dan discovered that not so nice truth that we all know but prefer not to think about-- that we set up security cameras, we put locks on doors, we have paperwork and passwords. And those things aren't there just for criminals. They're there, at the saying goes, to keep honest people honest. 00:01 If the Obama's want to go out for a theatre date or to the ballet or to hear YoYo Ma There is a place that has a special presidential box for them to sit in the Kennedy Center for the Performing Arts in Washington D.C. plush seats soaring ceilings all that stuff but when my cousin Dan Weiss worked there in the one nine hundred seventy S. He spent a lot of time in the basement he was a smart idealistic kid still in college the basement is where the stock room was for the gift shops upstairs when I started I was basically a stock clerk stock the gift shops each day was merchandise and I ran up and down the stairs all day long up and down up and down up and down that's a skill that was in demand at the gift shops because the gift shops were staffed by volunteers a lot of them retired three hundred volunteers all of our salespeople were well intentioned volunteers many of them simply wanted to be in the Kennedy Center to support the mission so these are retired people who love the theater love opera or love you know symphonies That's right I would suspect in my experience that not a single one of them had had a retail job before they took this job the gift shops they were to were run kind of like lemonade stands they sold T. shirts books commemorative spoons but no cash registers no receipts just a little cash box the volunteers would come in whenever their schedules allowed the Kennedy Center had just opened and at the beginning everything seemed sort of charming There were a lot of rules for instance when Dan found a stray cat meowing and hungry he kept it in the stock room with all the merchandise. Kind of famous he lived down there and had a parade of visitors Leonard Bernstein wanted to pet him and Miss kale Baryshnikov. The gift shops I should explain were not a small operation they sold four hundred thousand dollars worth of stuff a year and while no one like to talk about it in these lovely gift shops in this lovely building where the National Symphony played something was seriously wrong the good. Shopped operation was clearly. Underperforming there wasn't very much money making it to the bank given all the merchandise that we were selling and no one really understood why that was happening the nice man running the gift shop at the time got fired and Dan suddenly got a big promotion at age twenty one he became a manager of gift shops at the Kennedy Center for the Performing Arts his new job figure out where the money was disappearing to then didn't have any business training he'd majored in art history and psychology aside from a stint in high school at an ice cream parlor This was his first real job his first time seeing how business worked but he's a pretty driven guy and if you give him a task he's going to sink his teeth that the first thing he did was a bit of math so I tried to figure that out how much money we're losing how much merchant I swear we're losing and in the in the retail sales business they use the term quote shrinkage and that is the percentage of overall sales that you might be losing some house merchandise Cash who knows and it was almost forty percent when I took the job initially that means that forty cents on every dollar that was supposed to go into the bank was what we weren't sure where it was going but it wasn't going into the bank and what's what's a typical number out there in the world for small businesses back in the day when I did this work in the one nine hundred seventy S. a big shrinkage number at Macy's or some other store might be probably three percent. Were you present and we were we were big time we were forty percent. Somewhere there had to be a thief Dan ran through the entire gift shop operation methodically obsessive Lee and began to suspect one guy a younger guy in his twenty's one of the other paid employees who helped run the place the guy's job was to transfer the money from the cash box to the safe it closing time Dan's next. Well if you're the manager of a gift shop stealing from the cash box is kind of a strange sized problem to have you don't call the F.B.I. do you call the security guards you call the police turns out if you work at the Kennedy Center there is someone special you call I had to engage the United States Park Police Detective agents who oversaw the Kennedy Center special investigative arm of the United States Park Service who knew they had one I didn't until that began the park service assigned Dan a detective his name was loveless and I thought what a great name for a detective he was actually quite charming detective loveless had actually seen a lot this time and he was amused by the idea of a thief at a place known for opera musicals and ballet but he gave the job his full attention told Dan if you want to catch this guy we're going to have to plan out a sting operation so after work one day detective loveless picked up Dan in an unmarked car and drove to a secret location where his favorite place to meet which was I suppose if you're a policeman the secret place but it didn't seem so to me so you picked me up on the street in Washington and drive over Memorial Bridge and at the traffic circle on the other side of Memorial Bridge right in front of Arlington Cemetery which is on highway you would drive up the curb and park his car right there smack on the grass in the middle of the traffic circle on Memorial Bridge and we would spend twenty minutes or a half an hour sitting there probably seen by twenty five thousand people who drove by you know our secret place but I guess he assumed if you're right now in the middle of everything nobody notices you. One Friday night they set the trap Dan walks his nonchalantly as possible into the Kennedy Center gift shop says hi to the volunteers like nothing's up at all and puts some marked bills into the cash box then he walks outside to rejoin detective loveless who's chosen the most cliched spot for The Stakeout in the bushes for high. In the bushes on the other side of the road and peer across into the gift shop with binoculars I should tell you it was February and cold it may have been the coldest day in the history of Washington and there we were outside shivering in the bushes and he's looking through the binoculars and he would tell me somebody is coming to the gift shop let me take you to take a look at this tell me who this is who is this is this our guy is this or guy and he would hand me the binoculars and I would look and I say no that's not our guy that's an eighty five year old woman who's selling spoons to a customer and he said all right just checking and that's how it would go every time someone went near the gift shop he would pass me the binoculars. And then at just about the exact time the staff member showed up to close up the cash register he got very excited he said he's here he's here let's go intercept the guy on the way to his car and find yes marked bills in his pocket they put the guy in handcuffs and arrest him and so you might think Case closed right but the amount of money they found on the thief it wasn't that much sixty dollars just sixty bucks in fact when the case goes before a judge the judge basically throws it out all of which meant the problem Dan faced was much bigger remember the amount of revenue they were missing each year was over one hundred fifty thousand dollars Dando had another plan of attack a much more ordinary one paper work if the gift shop had been run like a lemonade stand now he wants ...
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School: University of Maryland

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