The Leslie Fay Companies

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The Leslie Fay Companies, which is a manufacturer of women’s apparel, was founded by Fred Pomerantz. The company is based out of New York, and Fred Pomerantz made the company public in 1952. However, Fred Pomerantz ended up taking the company back to a private entity for a few years in the 1980’s due to a buy out from his son John Pomerantz. The Leslie Fay Companies became public again in 1986. After John Pomerantz had taken over the company, profits started skyrocketing even though the market for women’s apparel was going downhill due to the recession from the 1980’s through the 1990’s. By looking at these financial statements, one can see there is a huge, constant increase of net income from 1987–1991. According to…show more content…
Another issue I would like to address as far as the Income Statement, the statement would also, address the section of Discontinued Operations. By this classification, the Discontinued Operations would show the losses of any department stores that went out of business, and show the gains of any companies Leslie Fay would have obtained during this time. As we know from the previous history, Leslie Fay obtained many department stores and loss many department stores, and the Discontinued Operations section would show any uncollectible receivables that Leslie Fay should be accounting for. In fact, according to Knapp, late 1989, Leslie Fay loss a huge amount from a receivable of Allied/Federated Department Stores after the store had filed bankruptcy (65), and the Discontinued Operations would show this amount (loss). According to Auditing and Assurance Services, audits are split up into cycles to make the audit much more manageable. So I would start with the sales and collection cycle and obtain the General Ledger and Journal entries starting with the general ledger cash account. According to Auditing and Assurance Services, the most important general ledger account is general cash because it connects most of the cycles (p 148-149). I would also obtain the master list of the accounts receivables to verify the total amount is the same as on the Balance Sheet. As it is

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