The accounts payable clerk for manufacturing company receives a purchase order copy for raw materials from the purchasing agent. the clerk files the po in a temporary file and awaits the vendor’s invoice before setting up a liability. a week later the clerk receives the vendors invoice, reconciles it with the po, posts the liability to the ap subsidiary ledger, and establishes a due date for payment. on the due date the clerk prepares a check for the invoiced amount and mails the check to the vendor. the ap clerk then updates the check register, accounts payable subsidiary ledger, and the ap control account from his terminal. finally, the clerk files the invoice, purchase order copy and check copy in the ap department. required: discuss the risks associated with this system. describe the internal controls needed to mitigate the risks.

P11.2a (lo 2, 4) fechter corporation had the following stockholders’ equity accounts on january 1, 2020: common stock ($5 par) $500,000, paid-in capital in excess of par—common stock $200,000, and retained earnings $100,000. in 2020, the company had the following treasury stock transactions. journalize and post treasury stock transactions, and prepare stockholders’ equity section. mar. 1 purchased 5,000 shares at $8 per share. june 1 sold 1,000 shares at $12 per share. sept. 1 sold 2,000 shares at $10 per share. dec. 1 sold 1,000 shares at $7 per share. fechter corporation uses the cost method of accounting for treasury stock. in 2020, the company reported net income of $30,000. instructions a. journalize the treasury stock transactions, and prepare the closing entry at december 31, 2020, for net income. b. open accounts for (1) paid-in capital from treasury stock, (2) treasury stock, and (3) retained earnings. (post to t-accounts.) c. prepare the stockholders’ equity section for fechter corporation at december 31, 2020.