Lawrence Company maintains its accounts on the basis of a fiscal year ending October 31. Assume that you were retained by the company in August to perform an audit for the fiscal year ending October 31,20X0. You decide to perform certain auditing procedures in advance of the balance sheet date. Among these interim procedures is the confirmation of accounts receivable, which you perform at September 30. The accounts receivable at September 30 consisted of approximately 200 accounts with balances totaling $956,750. Seventy-five of these accounts with balances totaling $650,725 were selected for confirmation. All but 20 of the confirmation requests have been returned; 30 were signed without comments, 14 had minor differences that have been cleared satisfactorily, and 11 confirmations had the following comments: 1. We are sorry, but we cannot answer your request for confirmation of our account because Moss Company uses a computerized accounts payable voucher system. 2. The balance of $1,050 was paid on September 23, 20X0. 3. The above balance of S7,750 was paid on October 5,20x0. 4. The above balance has been paid. 5. We do not owe you anything at September 30, 20X0, since the goods represented by your invoice dated September 30,20X0, Number 25,050, in the amount of $11,550, were received on October 5, 20x0, on FOB destination terms. 6. An advance pavment of $2 500 made by us in August 20XXO should cover the two invoices totaling $1.350 shown on the
Lawrence Company maintains its accounts on the basis of a fiscal year ending October 31. Assume that you were retained by the company in August to perform an audit for the fiscal year ending October 31,20X0. You decide to perform certain auditing procedures in advance of the balance sheet date. Among these interim procedures is the confirmation of accounts receivable, which you perform at September 30. The accounts receivable at September 30 consisted of approximately 200 accounts with balances totaling $956,750. Seventy-five of these accounts with balances totaling $650,725 were selected for confirmation. All but 20 of the confirmation requests have been returned; 30 were signed without comments, 14 had minor differences that have been cleared satisfactorily, and 11 confirmations had the following comments: 1. We are sorry, but we cannot answer your request for confirmation of our account because Moss Company uses a computerized accounts payable voucher system. 2. The balance of $1,050 was paid on September 23, 20X0. 3. The above balance of S7,750 was paid on October 5,20x0. 4. The above balance has been paid. 5. We do not owe you anything at September 30, 20X0, since the goods represented by your invoice dated September 30,20X0, Number 25,050, in the amount of $11,550, were received on October 5, 20x0, on FOB destination terms. 6. An advance pavment of $2 500 made by us in August 20XXO should cover the two invoices totaling $1.350 shown on the
Financial Accounting
15th Edition
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter5: Accounting Systems
Section: Chapter Questions
Problem 19E: After Bunker Hill Assay Services Inc. had completed all postings for March in the current year...
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