An entity should consider the cost of a control in relationship to the risk. Which of the following controls best reflects this

Answer:

1.                                Damon Company

                     Bank Reconciliation Statement

                               October 31, 2018

Bank Balance                        

                                                                        Amount$

Bank cash balance as per statement             11,725

Add: Adjustment

       Deposits outstanding                               3,025

       (74,320 - 71,295)

       Bank error                                                  300

Less: Adjustment

         Check outstanding                                  1,485

         (72,467 - 70,983)

Bank balance as per Reconciliation              $13,567

Company's Cash balance

                                                                                   Amount$

Company's Cash balance as per General Ledger    8,397

Add: Adjustment

         Interest earned                                                    320

         Note collected                                                      5,000

Less: Adjustment

         Bank service fees                                                 150

Company's Cash balance as per Reconciliation         13,567

Thus, the accurate cash balance as of December 31, 2016 is $13,567

2. Required entries to modify the cash balance.

Date      Account Title and Explanation               Debit     Credit

31 Oct   Cash                                                            $5,320

                   Notes Receivables                                              $500

                    Interest revenue                                                 $320

              (For recording cash increase)

Date   Account Title and Explanation               Debit     Credit

31 Oct  Service charges                                        $150

                  Cash                                                                  $150

            (For recording cash decreases)

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Answer:

The Beet Juice should undergo additional processing

Explanation:

A business should opt for further processing of a product if the income gained from the split-off point exceeds the costs associated with that further processing.

It’s also vital to understand that all expenses incurred before the crushing stage are considered irrelevant to the decision on further processing.

Product           Additional Rev.     Further process cost.     Net income(loss) ($)

Beet Fiber       40-27 =13                         16                              (3) See notes

Beet Juice       100- 43 = 57                28                              29

It is advisable to further process the beet juice into refined sugar while the beet fiber should not be processed any more. Processing the Beet Juice further will yield an additional profit of $29 per unit while Beet Fiber would lead to a deficit of  $(3)

Notes

The net income(loss) is calculated as the difference between income from further processing and the expenses for that processing. The net income(loss) for each product is worked out in the following way:

Beet Fiber  = 13- 16 = (3)

Beet Juice  = 57 - 28 = 29

Variable work timetable is an adaptable work arrangement that lacks a set structure. This type of schedule allows employees to fulfill their working hours on days when they are absent. In this instance, Jessica has a commitment of working forty hours weekly, specifically from 9:00 a.m. until 5:00 p.m. Should she miss a day, she must compensate by putting in additional hours later. This exemplifies a variable work schedule.