In the audit of Checkers, Inc., a nonissuer, the auditor was assigned to a test of cash disbursements. The auditor randomly selected a sample of 75 items out of the 1,500 disbursements made. After completing the test procedures, the auditor determined that the sample contained several misstatements totaling $4,500. All of these were overstatements. The auditor then computed a projected misstatement of $90,000 $24,500 $337,500 $112,500 0000
Q: Contribution Margin Income Statement Sales (15,000 units x $12 per unit) Variable costs (15,000…
A: Scenario 1:**Change:** Units sold and produced increase from 15,000 to 15,500 units; Fixed costs…
Q: Denger
A: a July August September Cash, Beg 47,000 47,456…
Q: Munabhai
A: The objective of the question is to calculate the dividends declared during the year by Willie…
Q: At the end of the period, Massive Designs had the following debit balances in its accounts. Raw…
A: WIP = $40,000Finished goods = $60,000Cost of goods sold = $ 400,000Ratio = 40,000 : 60,000 :…
Q: A company has the following assets: 27,000,000 $4,000,000 $23,000,000 1,500,000 3,000,000 Buildings…
A: Property, plant and equipment are the assets that are acquired for long term use and owned by the…
Q: Ashvin
A: Certainly! Let's break down the explanation of each consolidated balance item based on the provided…
Q: Steve, a super salesman contemplating retirement on his fifty-fifth birthday, decides to create a…
A: Steve wants to set up a fund that will enable him to take out $59,000 every year starting in 2029…
Q: Answer.
A: Carrying Value of Bonds: The carrying value of bonds is determined by subtracting the unamortized…
Q: Accounting question
A: Adjusting account balances is a crucial step in the accounting cycle to ensure that all financial…
Q: Task 6. The following are consumed for the production of one unit: ➤18 kg of material A (price 1 € /…
A: The objective of the question is to calculate the variable production costs per unit, unit cost of…
Q: eBook Problem 8-33 (LO. 2) Debra acquired and placed in service the following new assets during…
A: Here's how the rates I've mentioned were derived: 5-yr property: The standard MACRS desk for 5-yr…
Q: nkt.5
A: Answers: 1. - Interest revenue from notes receivable: $110,000 x 8% = $8,800 (from the $240,000…
Q: None
A: Dear student,Part 1: Answer:a. Step 1: Calculate the net realizable value (NRV) of the by-product…
Q: Required: a. Based on the fact that the project appears to have 9,360 square feet of surface area in…
A: In this situation, you have to figure out if a real estate development project is financially…
Q: Gadubhai
A: Journal Entry for Factoring of Accounts Receivable (Without Recourse)Date: (Enter Recording…
Q: Domestic
A: The information given in the image does not provide data that requires a calculation for the journal…
Q: None
A: Required A: Compute taxable income if Taylor's AGI consists entirely of interest income. Taylor is…
Q: Q.Hunt Co began operations in 2025. Estimated warranty expense of $800,000 will be deductible in…
A: Future taxable amounts are those that increase the income tax payable in the future period as…
Q: Car Geek is a retail store that sells car care products over the Internet. The firm's cash receipts…
A: Opening Balances on February 1, 20X1: Cash (101): $4,860 debitSales (401): $0Notes Receivable (109):…
Q: Sheridan Motor Corporation bought equipment on January 1, 2025. The equipment cost $420000 and had…
A: DEPRECIATION EXPENSEDepreciation means gradual decrease in value of assets due to normal wear and…
Q: 1. A company pays $4,500,000 for a building, land, and equipment. Based on an appraisal, the land…
A:
Q: Listed below are the transactions that affected the shareholders' equity of Branch-Rickie…
A: Answer:- The stockholder's equity section is a section of a company's balance sheet that shows the…
Q: Salt Foods purchases ten $1,000, 6%, 10-year bonds issued by Pretzelmania, Incorporated, for $10,000…
A: The accounting equation states that assets are equal to the sum of the liabilities and equity. The…
Q: Support Department Cost Allocation-Reciprocal Services Method Brewster Toymakers Inc. produces toys…
A: Support department costs are allocated based on various methods such as direct method, step method…
Q: After collecting basis data, a canola grower feels that 775 dollars per tonne is a realistic forward…
A: T-accounts, which arrange, summarize, and visualize financial transactions, are essential to the…
Q: Westmont Corporation uses a comprehensive budgeting system for planning and control purposes. While…
A: The variances are calculated as follows:Supplies: The variance is favorable because the actual cost…
Q: Ashvinbhai
A: The objective of the question is to prepare a budgeted income statement for Shadee Corporation for…
Q: Question 1 A, B, and C plan to liquidate their Ocean Breeze Pool and Spa business. They have always…
A: A partnership is a form of business in which two or more people come together to operate and manage…
Q: Four independent situations are described below. Each involves future deductible amounts and/or…
A: The temporary difference between the amount of income calculated in accordance with tax laws and…
Q: Dixie Co. Budgeting Income Statement Sales $ 600,000 Cost of Goods Sold $ 360,000 Gross Profit $…
A: Income statement is a financial statement that shows profitability, total revenue and total…
Q: Jake's Roof Repair provided the following data concerning its costs: Fixed Cost Cost per per Month…
A: Activity Variance :— It is the difference between flexible budget and planning budget. Flexible…
Q: The Stockholder's Equity accounts of a corporation on January 1, 2022, were as follows: Preferred…
A: Breakdown of how to find the number of outstanding common shares: Start with authorized common…
Q: Ava received 100 NQOs (each option provides a right to purchase 10 shares of CAM stock for $8 per…
A: Non qualified stock option is a right/option given to employees, to buy stocks of the company. Such…
Q: On January 1, 2020, Susan Company disclosed the following shareholder's equity: Share capital, P100…
A: Selling shares is how a firm makes money. We refer to this cash as "share capital." Equity is the…
Q: None
A: Microsoft Game Sony Game AA x 7,100 units BB x 7,100 unitsRevenue$152.00$ 1,079,200$…
Q: On January 1, 2024, Water World Issues $24.8 million of 6% bonds, due in 20 years, with interest…
A: Step 1: Let us first identify the givenBond pricing refers to the process of determining the…
Q: Gadubhai
A: The questions ask you to analyze the information in the income statement and calculate the revised…
Q: None
A: Step 1: To calculate the ending inventory and cost of goods sold first calculate the Cost of Goods…
Q: A business had the following information in its acounts for the year:…
A: The objective of the question is to calculate the average number of days it takes for a business to…
Q: The following errors were discovered on the books of Nash Corporation, during the 2024 year-end…
A: The objective of this question is to correct the error in the inventory count of Nash Corporation…
Q: Complete in Excel ABC Inc. has had a defined benefit pension plan since January 1, 2018. The…
A: ABC Inc. Defined Benefit Pension Plan - 20221. Determining Pension Items:Description Formula…
Q: Consider the following two mutually exclusive projects: Year Cash Flow (X) Cash Flow (Y) 0 $20,000…
A: The objective of this question is to calculate the Internal Rate of Return (IRR) for two projects…
Q: On October 15, 2023, the board of directors of Martinez Materials Corporation approved a stock…
A: 1) The stock option is measured on the grant date. In this case, the stock options were granted on…
Q: None
A: Certainly! Let's break down the marketing expense budget for Hair-Again step by step.**1. Commission…
Q: None
A: Ending or closing inventory is the amount of inventory that an entity has on hand, at the end of the…
Q: Tiger Company completed the following transactions. The annual accounting period ends December 31.…
A: Accounting Equation is a summary which represents the effect of each transaction on the balance…
Q: 1. The business was started when the company received $49,000 from the issue of common stock. 2.…
A: Financial Statements include Income Statement, Statement of Stockholder's Equity, Balance Sheet and…
Q: In March, Sandhill Company completes Jobs 10 and 11. Job 10 cost $24,000 and Job 11 $36,000. On…
A: Step 1: To record the completion of the two jobsDateAccount title and…
Q: Alex and Addison are married and have the following income items: Alex's salary Addison's Schedule C…
A: Taxable income is the base income upon which tax is levied. It includes some or all of income earned…
Q: pick the support of the product manager and president. Also provide the reasons from the dropdown
A: Understanding the Scenario:We are presented with information from two panels - Panel A and Panel B.…
Step by step
Solved in 2 steps with 2 images
- James Duffney, CPA, has randomly selected and audited a sample of 100 of Will-Mart’s accounts receivable. Will-Mart has 6,140 accounts receivable accounts with a total book value of $6,000,000. Duffney has determined that the account’s tolerable misstatement is $500,000. His sample results are as follows: Average audited value $962 Average book value 970 Required: Calculate the accounts receivable estimated audited value and projected misstatement using the: a. Mean-per-unit method. b. Ratio method. c. Difference method.You're the senior auditor-in-charge of the July 31, 20x0, audit of reliable Auto Part, Inc. Your newly hired staff assistant reports to you that she is unable to complete the four-column proof of cash for the month of April 20x0, which you instructed her to do as part of the consideration of internal control over cash. Your assistant shows you the working paper that she has prepared. Your review of your assistant's work reveals that the dollar amounts of all the items in her working paper are correct. You learn that the accountant for Reliable Auto Part, Inc. makes no journal entries for the bank service charges or note collections until the month following the bank's recording of the item. In addition, Reliable's accountant makes no journal entries whatsoever for NSF checks that are redeposited and cleared. Your assistant's working paper appears below. (refer to the image; those are same, it is quite blurry) Required:Prepare a corrected four-column proof of cash in good form for…For the following independent situations, assume that you are the audit partner on the engagement: 1. The client recorded impairment of goodwill for $40,000 last year. It recorded reversal of impairment in goodwill for $20,000 this year after considering the carrying amount and recoverable amount of the cash generating unit. Net income is $10,000 in current year. Discuss the most appropriate type of opinion the auditor should issue. Explain briefly the reason for the opinion.
- The 1,000 accounts receivable of Gamco Company have a total book value of $20,000. Wilbur Schneitz, Certified Public Accountant (CPA), has selected and audited a sample of 50 accounts with a total book value of $900. Using nonstatistical variables sampling and the difference estimation technique, Smith has properly estimated a projected misstatement of an overstatement of $3,000 for the entire population. The total audited value of Schneitz’s sample is: 650 1000 750 900The 1,500 accounts receivable of DEF Company have a total book value of $30,000. Bob Smith, Certified Public Accountant (CPA), has selected and audited a sample of 50 accounts with a total book value of $1,050. Using the difference estimation technique, Smith has properly estimated a projected misstatement of an overstatement of $3,000 for the entire population. The total audited value of Smith's sample is: Multiple Choice $900 $1,150 $850 $950Johnny Kang, CPA, is the auditor of the Felix Lee Ltd. Johnny Kang, CPA is considering the audit work to be performed in the accounts payable area for the current year’s engagement. The prior year papers show that confirmation requests were mailed to one hundred of the client’s one thousand suppliers. The selected suppliers were based on Johnny Kang’s sampling, which was designed to select high value items in the accounts payable balance. Johnny Kang and Felix Lee Ltd.’s accountant, DY Anderson spent substantial number of hours resolving relatively minor differences between the confirmation replies and accounting records. Alternative audit procedures were used for those suppliers who did not respond to the confirmation requests. Required:1. Identify the accounts payable assertions that Johnny Kang must consider in determining the substantive tests to be followed. 2. Identify situations for which Johnny Kang should use accounts payable confirmations and discuss whether he is required to…
- While auditing the financial statements of Petty Corporation, the certified public accounting firm of Trueblue and Smith discovered that its client’s legal expense account was abnormally high. Further investigation of the records indicated the following: Since the beginning of the year, several disbursements totaling $15,000 had been made to the law firm of Swindle, Fox, and Kreip. Swindle, Fox, and Kreip were not Petty Corporation’s attorneys. A review of the canceled checks showed that they had been written and approved by Mary Boghas, the cash disbursements clerk. Boghas’s other duties included performing the end of-month bank reconciliation. Subsequent investigation revealed that Swindle, Fox, and Kreip are representing Mary Boghas in an unrelated embezzlement case in which she is the defendant. The checks had been written in payment of her personal legal fees. Required: a. What control procedures could Petty Corporation have employed to prevent this unauthorized use of cash?…The auditors of Landi Corporation wish to use a structured approach to nonstatistical sampling to evaluate the reasonableness of the accounts receivable. Landi has 15,000 receivable accounts with a total book value of $2,500,000. The auditors have assessed the combined level of inherent and control risk at a moderate level and believe that their other substantive procedures are so limited as to require a “maximum” risk assessment. After considering the overall audit plan, the auditors believe that the test’s tolerable misstatement is $57,500. Use figure below to determine the reliability factor. Please calculate the sample size. Risk That Other Substantive Procedures Will Fail to Detect a Material Misstatement Combined Assessment of Inherent and Control Risk Maximum Moderate Low Maximum 3.0 2.3 1.9 Slightly below Maximum 2.7 2.0 1.6 Moderate 2.3 1.6 1.2 Low 1.9 1.2 1.0Assume that you have audited accounts receivable as of 12/31/2020 and are confident that the ending balance should be $7,188,000. Further, you know that the audited balance as of 12/31/2019 was $8,462,000. You also verified cash deposits from customers through a review of the bank account. Based on that review you believe that cash receipts from customers ranges from an amount of $40,000,000 to $41,000,000. Which amount below would represent an overstatement of revenue for the year ending 12/31/2020, based on the facts above? 1. $38,500,000 2. $41,000,000 3. $39,762,000 4. $39,100,000
- Read the following scenario about Strang Corporation and identify the substantive procedures that the CPA (Elaine Stanley) should perform to determine whether lapping exists. Do not discuss deficiencies in the system of internal control. During the year, Strang Corporation began to encounter cash flow difficulties, and a cursory review by management revealed receivable collection problems. Strang’s management engaged Elaine Stan ley, CPA, to perform a special investigation. Stanley studied the billing and collection cycle and noted the following: The accounting department employs one bookkeeper who receives and opens all incoming mail. This bookkeeper is also responsible for depositing receipts, filing daily remittance advices, recording receipts in the cash receipts journal, and posting receipts in the individual customer accounts and the general ledger accounts. There are no cash sales. The bookkeeper prepares and controls the mailing of monthly statements to customers. The concentration of functions and the receivable collection problems caused Stanley to suspect that a systematic theft of customers’ payments through a delayed posting of remittances (lapping of accounts receivable) is present.McMullen and Milligan, CPAs, were conducting the audit of Cusick Machine Tool Company for the year ended December 31. Jim Sigmund, senior-in-charge of th audit, plans to use MUS to audit Cusick's invenotry account. Thee balance at December 31 was $9,000,000. Required: A) Based on the following information, compute the required MUS sample size: Tolerable misstatement = $360,000 Expected misstatement = $90,000 Risk of incorrect acceptance = 5% B) Nancy Van Pelt, staff accountant, used the sample items selected in part (a) and performed the audit procedures listed in the inventory audit program. She notes the following misstatements: Misstatement Number Book Value Audit Value 1 $10,000 $7,500 2 $9,000 $6,000 3 $60,000 0…McMullen and Milligan, CPAs, were conducting the audit of Cusick Machine Tool Company for the year ended December 31. Jim Sigmund, senior-in-charge of th audit, plans to use MUS to audit Cusick's invenotry account. Thee balance at December 31 was $9,000,000. Required: A) Based on the following information, compute the required MUS sample size: Tolerable misstatement = $360,000 Expected misstatement = $90,000 Risk of incorrect acceptance = 5% B) Nancy Van Pelt, staff accountant, used the sample items selected in part (a) and performed the audit procedures listed in the inventory audit program. She notes the following misstatements: Misstatement Number Book Value Audit Value 1 $10,000 $7,500 2 $9,000 $6,000 3 $60,000 0…