You are the audit team assign to audit the unaudited set of financial statements for XYZ Company Ltd. for year ended 30 June 2002.Prepare written report to highlight the audit procedures to be used to substantiate/confirm the amounts reported for following items on the financial statements provided: Purchases and accounts payable REVENUECOST OF SALESOpening inventoryDeliveryPurchasesClosing inventoryGROSS PROFITXYZ COMPANY LIMITEDSTATEMENT OF INCOME AND RETAINED EARNINGSFOR THE YEAR ENDEDJUNE 30, 2002OPERATING EXPENSES (schedule)INCOME FROM OPERATIONSUNAUDITED - See "Notice to Reader"OTHER INCOME (EXPENSES)Loss on disposal of property, plant and equipmentGain on sale of investmentMiscellaneousNET INCOME BEFORE TAXINCOME TAX EXPENSENET INCOMEDIVIDENDS(DEFICIT)- Beginning of YearRETAINED EARNINGS (DEFICIT) - End of Year2002$ 1,104,786$156,6571,607740,994899,258159,144740,114364,672286,81777,85516,149(1,101)15,04892,90314,38778,516(61,350)17,166$ 1,133,736$2001The accompanying summary of significant accounting policies and notes are an integral part of these financial statements.146,2781,249794,101941,628156,657784,971348,765339,9058,860(387)337(50)8,8108,810(54,160)(16,000)(61,350) CURRENTCashASSETSINVESTMENTSAccounts receivableDeposits and prepaid expensesInventoryCURRENTPROPERTY, PLANT AND EQUIPMENT (Note 2)LIABILITIESBank overdraftBank loanXYZ COMPANY LIMITEDBALANCE SHEETUNAUDITED - See "Notice to Reader"Accounts payable and accrued liabilitiesLong-term debt current portionIncome tax payableDUE TO SHAREHOLDER (Note 3)LONG-TERM DEBT (Note 4)AS ATJUNE 30, 2002SHAREHOLDER'S EQUITYSTATED CAPITAL (Note 5)RETAINED EARNINGS (DEFICIT)APPROVED$$200211,55242,9702,942159,144216,60859,890276,49882,05325,20014,387121,64051,59186,100259,331117,16617,167276,498$2001The accompanying summary of significant accounting policies and notes are an integral part these financial statements.50,5952,688156,657209,94076,31845,001331,2599,47460,00091,343160,817231,791392,608(61,350)(61,349)$ 331,259

Audit procedure refers to the method or way of collecting as well as analysing the data for…

You are the audit team assign to audit the unaudited set of financial statements for XYZ Company Ltd. for year ended 30 June 2002. Prepare written report to highlight the audit procedures to be used to substantiate/confirm the amounts reported for following items on the financial statements provided: Purchases and accounts payable

You are the audit team assign to audit the unaudited set of financial statements for XYZ Company Ltd. for year ended 30 June 2002. Prepare written report to highlight the audit procedures to be used to substantiate/confirm the amounts reported for following items on the financial statements provided: Purchases and accounts payable

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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