SUMMARY Private Fitness LLC 
SUMMARY
Private Fitness LLC is a small health club located in Rancho Palos Verdes, California, an upscale community located in the Los Angeles area. The club offers personal fitness training and fitness classes of various types including aerobics, spinning, body sculpting, air boxing, kickboxing, hip hop, step and pump, dynamic stretch, Pilates, and yoga.
The following services and fees per hour are collected by Private Fitness LLC: With personal trainers/instructors
Private Fitness LLC is owned by Rosemary Worth, a former finalist in the Ms. Fitness USA competition. She had been working as an aerobics instructor and fitness model before starting Private Fitness. To open the club, Rosemary had to use almost all her personal savings, plus she had to take out a bank loan. She spent $150K to renovate the facility of her club and acquire the necessary fitness equipments.
Rosemary hired Kate Hoffman as a business manager. Kate’s primary tasks included marketing, facility upkeep, scheduling of appointments, and record keeping. Kate was paid a salary plus a commission based on gross revenues. Kate was proving to be an effective marketing manager because the number of clients was growing, and Rosemary hoped that by the end of the year the business would be earning a profit.
However, Rosemary became suspicious of Kate and gradually realized that Kate wasstealing from the club. One time, a $60 was replaced with $20 in the cash drawer. Rosemary asked Kate but the latter denied that there had been $60 dollars in the drawer.
Rosemary became very alarmed when, during a casual conversation, one of the instructors mentioned about the “good news” about Kate bringing in new private fitness client but no new revenue was recorded. Kate finally admitted that the client has been writing her personal checks directly. Rosemary realized she had two major problems: the theft of cash and the unrecorded revenue. These are internal control issues that Rosemary need to address. She
Private Fitness LLC is a small health club located in Rancho Palos Verdes, California, an upscale community located in the Los Angeles area. The club offers personal fitness training and fitness classes of various types including aerobics, spinning, body sculpting, air boxing, kickboxing, hip hop, step and pump, dynamic stretch, Pilates, and yoga.
The following services and fees per hour are collected by Private Fitness LLC: With personal trainers/instructors
Private Fitness LLC is owned by Rosemary Worth, a former finalist in the Ms. Fitness USA competition. She had been working as an aerobics instructor and fitness model before starting Private Fitness. To open the club, Rosemary had to use almost all her personal savings, plus she had to take out a bank loan. She spent $150K to renovate the facility of her club and acquire the necessary fitness equipments.
Rosemary hired Kate Hoffman as a business manager. Kate’s primary tasks included marketing, facility upkeep, scheduling of appointments, and record keeping. Kate was paid a salary plus a commission based on gross revenues. Kate was proving to be an effective marketing manager because the number of clients was growing, and Rosemary hoped that by the end of the year the business would be earning a profit.
However, Rosemary became suspicious of Kate and gradually realized that Kate wasstealing from the club. One time, a $60 was replaced with $20 in the cash drawer. Rosemary asked Kate but the latter denied that there had been $60 dollars in the drawer.
Rosemary became very alarmed when, during a casual conversation, one of the instructors mentioned about the “good news” about Kate bringing in new private fitness client but no new revenue was recorded. Kate finally admitted that the client has been writing her personal checks directly. Rosemary realized she had two major problems: the theft of cash and the unrecorded revenue. These are internal control issues that Rosemary need to address. She