MZ Communications Sdn. Bhd. is a large mobile phone company which operates a network of stores in countries across Malvives Island. The company's year end is 30 September 2019 and is a new client for Sanusi & associates. Mr Sammy is the audit senior of Sanusi & Associates and have been provided with the following planning notes from the audit partner following his meeting with the finance director. MZ purchases goods from a supplier in South Asia and these goods are shipped to the company's central warehouse. The goods are usually in transit for a month and the company correctly records the goods when received. MZ does not undertake a year-end inventory count, but carries out monthly continuous (perpetual) inventory counts and any errors identified are adjusted in the inventory system for that month. During the year, the company introduced a bonus based on sales for its sales persons. The bonus target was based on increasing the number of customers signing up for 36 month phone line contracts. This has been successful and revenue has increased by 30%, especially in the last few months of the year.

MZ Communications Sdn. Bhd. is a large mobile phone company which operates a network of stores in countries across Malvives Island. The company's year end is 30 September 2019 and is a new client for Sanusi & associates. Mr Sammy is the audit senior of Sanusi & Associates and have been provided with the following planning notes from the audit partner following his meeting with the finance director. MZ purchases goods from a supplier in South Asia and these goods are shipped to the company's central warehouse. The goods are usually in transit for a month and the company correctly records the goods when received. MZ does not undertake a year-end inventory count, but carries out monthly continuous (perpetual) inventory counts and any errors identified are adjusted in the inventory system for that month. During the year, the company introduced a bonus based on sales for its sales persons. The bonus target was based on increasing the number of customers signing up for 36 month phone line contracts. This has been successful and revenue has increased by 30%, especially in the last few months of the year.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 1P

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