FINANCIAL ACCOUNTING LOOSELEAF
2nd Edition
ISBN: 9781119493631
Author: Kimmel
Publisher: WILEY
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Consider the annual report of commonwealth bank or any company (most companies make their annual reports available on the company's website) and find the disclosures explaining the amounts paid to auditors. How much was the auditor paid for the audit, non-assurance, or other services?
For the 2021 audit of the financial statements, you are tasked to audit EMPLEO
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EMPLEO Corporation as of December 31, 2021:
Accounts payable for goods and services purchased on open account amounted
to P350,000 on December 31, 2021. This amount was gross of a supplier's debit
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At December 31, 2021, EMPLEO declared a cash dividend at PO.50 per share on
its P10 par value ordinary share capital, payable at January 12, 2022, to
shareholders as of December 31, 2022. At December 31, 2021, EMPLEO had
1,000,0000 issued ordinary shares and 800,000 oustanding ordinary shares.
The company financed its receivables, dated November 1, 2021, by discounting its 180-day P400,000 accounts receivable to a bank on a with…
The accountant of Hiddleston Corporation presented to you the following details of its subsidiary ledger in relation to your audit of the company’s accounts receivable balance as of December 31, 2021: Customer Invoice Date Amount Zulu Inc. December 20 550,000 December 1 1,200,000 October 11 950,000 August 4 420,000 Whiskey Co. November 20 2,000,000 September 4 900,000 August 2 500,000 Uniform Inc. December 10 1,750,000 October 4 600,000 July 5 500,000 Uniform Inc. September 9…
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- All companies are required to disclose in their annual reports the amounts paid to their auditors for both the financial report audit and any other services performed for the company. Required Obtain a copy of a recent annual report (most companies make their annual reports available on the company's website) and find the disclosures explaining the amounts paid to auditors. How much was the auditor paid for the audit, non-assurance, or other services?arrow_forwardYou are an audit manager at Foyer & Associates and have been assigned to the audit of Modern Electrical Limited (MEL) for the year ending 30 June 2021. During the planning stage of the audit, you become aware of the following matters: a.MEL has significant loans from its bank. The bank has Indicated that it is concerned about MEL'S ability to meet specific loan covenants, particularly the return on total assets (net b. The aped trade accounts receivable listing indicates that the percentage of accounts receivable exceeding 90 days has jumped from 15 per cent to 37.5 per cent during the last 12 months. The credit manager hasindicated that the is because some of MEL'S Customers are currently'experiencing financial difficulty. This question.includos Part A and B part- a for each of the following scenerio describe briefly how this matter is a fraud audit risk factor in relation to mel's financial report.arrow_forwardIn line with your audit with DAVE, Inc. financial statements, the company accountant presented to you the balance sheet that follows. You reviewed the client’s accounting records and books based thereon. You discovered that books of accounts are in agreement in the said balance sheet as presented below: DAVE, INC. STATEMENT OF FINANCIAL POSITION December 31, 2021 ASSETS LIABILITIES AND OWNERS' EQUITY Cash P 80,000 Accounts Payable P 32,000 Accounts Receivable 160,000 Notes Payable 64,000 Notes Receivable 48,000 Capital Stock 160,000 Inventories 400,000 Retained Earnings 432,000 Total P 688,000 Total P 688,000 Further review and investigation of the company’s books revealed the following omissions and errors which were not corrected during the year of errors: 2018 2019 2020 2021 Deferred expense 14,400 11,200 8,000 9,600 Deferred income 6,400…arrow_forward
- In line with your audit with DAVE, Inc. financial statements, the company accountant presented to you the balance sheet that follows. You reviewed the client’s accounting records and books based thereon. You discovered that books of accounts are in agreement in the said balance sheet as presented below: DAVE, INC. STATEMENT OF FINANCIAL POSITION December 31, 2021 ASSETS LIABILITIES AND OWNERS' EQUITY Cash P 80,000 Accounts Payable P 32,000 Accounts Receivable 160,000 Notes Payable 64,000 Notes Receivable 48,000 Capital Stock 160,000 Inventories 400,000 Retained Earnings 432,000 Total P 688,000 Total P 688,000 Further review and investigation of the company’s books revealed the following omissions and errors which were not corrected during the year of errors: 2018 2019 2020 2021 Deferred expense 14,400 11,200 8,000 9,600 Deferred income 6,400…arrow_forwardIn line with your audit with DAVE, Inc. financial statements, the company accountant presented to you the balance sheet that follows. You reviewed the client’s accounting records and books based thereon. You discovered that books of accounts are in agreement in the said balance sheet as presented below: DAVE, INC. STATEMENT OF FINANCIAL POSITION December 31, 2021 ASSETS LIABILITIES AND OWNERS' EQUITY Cash P 80,000 Accounts Payable P 32,000 Accounts Receivable 160,000 Notes Payable 64,000 Notes Receivable 48,000 Capital Stock 160,000 Inventories 400,000 Retained Earnings 432,000 Total P 688,000 Total P 688,000 Further review and investigation of the company’s books revealed the following omissions and errors which were not corrected during the year of errors: 2018 2019 2020 2021 Deferred expense 14,400 11,200 8,000 9,600 Deferred income 6,400…arrow_forwardIn line with your audit with DAVE, Inc. financial statements, the company accountant presented to you the balance sheet that follows. You reviewed the client’s accounting records and books based thereon. You discovered that books of accounts are in agreement in the said balance sheet as presented below: DAVE, INC. STATEMENT OF FINANCIAL POSITION December 31, 2021 ASSETS LIABILITIES AND OWNERS' EQUITY Cash P 80,000 Accounts Payable P 32,000 Accounts Receivable 160,000 Notes Payable 64,000 Notes Receivable 48,000 Capital Stock 160,000 Inventories 400,000 Retained Earnings 432,000 Total P 688,000 Total P 688,000 Further review and investigation of the company’s books revealed the following omissions and errors which were not corrected during the year of errors: 2018 2019 2020 2021 Deferred expense 14,400 11,200 8,000 9,600 Deferred income 6,400…arrow_forward
- The 2021 financial statement audit of OMG company began when the trial balance was received from management. You were assigned to audit the accounts payable of the entity. The schedule of liabilities to vendor showed that the company has only five suppliers which account for 90% of the total accounts payable balance. Thus, the audit team has decided to send confirmation letters to those vendors. Upon your further review, you have noted that the amounts provided in the schedule and the trial balance does not balance, but you have noted that the difference is below the materiality threshold. Considering the facts provided, which of the following statements is true? Group of answer choices A. Since the difference is below materiality, there is no need to change samples. B. The sampling technique used by the audit associate is invalid because it involves bias. C. There is a sampling risk associated with the audit sampling procedure performed by the audit associate D. Negative…arrow_forwardThe 2021 financial statement audit of OMG company began when the trial balance was received from management. You were assigned to audit the accounts payable of the entity. The schedule of liabilities to vendor showed that the company has only five suppliers which account for 90% of the total accounts payable balance. Thus, the audit team has decided to send confirmation letters to those vendors. Upon your further review, you have noted that the amounts provided in the schedule and the trial balance does not balance, but you have noted that the difference is below the materiality threshold. Considering the facts provided, which of the following statements is true? Choices Since the difference is below materiality, there is no need to change samples. Negative confirmation letters may be sent to the suppliers even if we did not rely on controls. The sampling technique used by the audit associate is invalid because it involves bias. There is a sampling risk associated with the audit…arrow_forwardThe 2021 financial statement audit of OMG company began when the trial balance was received from management. You were assigned to audit the accounts payable of the entity. The schedule of liabilities to vendor showed that the company has only five suppliers which account for 90% of the total accounts payable balance. Thus, the audit team has decided to send confirmation letters to those vendors. Upon your further review, you have noted that the amounts provided in the schedule and the trial balance does not balance, but you have noted that the difference is below the materiality threshold. Considering the facts provided, which of the following statements is true? A. Negative confirmation letters may be sent to the suppliers even if we did not rely on controls. B. There is a sampling risk associated with the audit sampling procedure performed by the audit assaciate C. The sampling technique used by the audit associate is invald because it involves bias. D. Since the difference is below…arrow_forward
- Milton Chambers CIA was retained by Hall Corporation to perform an audit of its financial statements for the year ending December 31. In a preliminary meeting with company officials, Chambers learned that the corporation customarily accepted numerous notes receivable from its customers. At December 31, the client company’s controlled provided Chamber with a list of the individual notes receivable owned at that date. The list showed for each note the date of the note, amount, interest rate, maturity date, and name and address of the maker. After a careful consideration of the internal control relating to notes receivable, Chambers turned his attention to the list of notes receivable provided to him by the controller. Chambers proved the footing of the list and determined that the total agreed with the general ledger control account for notes receivable and also with the amount shown in the balance sheet. Next he selected 20 of the larger amounts on the list of notes receivable for…arrow_forwardYou have been assigned to audit the financial statements of SAN MIGUEL CORPORATION for the year 2017. The company is a dealer of appliances and has several branches in Metro Manila. Its main office is in Makati City. You were given by the company controller the unadjusted balances of the items to be included in the company’s statement of financial position and statement of income as of and for the year ended December 31, 2017. Audit findings are as follows: I. AUDIT OF CASH A cash count was conducted by your staff on January 7, 2018. The petty cash fund of P60,000 maintained by the company on an imprest basis reflected a balance of P22,750. Unreplenished expenses totaled P37,250 of which P9,510 pertains to January 2018. You were furnished a copy of the company’s bank reconciliation statement with BPI Bank as follows: Balance per bank P277,994 Add: Deposit in transit 248,836 Bank debit memos 712,750 Returned check 63,000 Less: Outstanding checks (174,580) Book error (72,000) Balance…arrow_forwardAs a part of his audit of the financial statements of Marlborough Corporation for the year ended March 31, 199X, Mark Wayne, CIA is reviewing the balance sheet presentation of a $1,200,000 advance to Franklin Olds. Marlborough’s president. The advance, which represents 50 percent of current assets and 10 percent of total assets, was made during the year ended March 31, 199X. it has been described in the balance sheet as “miscellaneous accounts receivable” and classified as a current assets. Olds informs the CIA that he has used the proceeds of the advance to purchase 35,000 shares of Marlborough’s common stock, in order to forestall a takeover raid on the company. He is reluctant to have his association with the advance described in the financial statements because he does not have voting control and fears that this will “just give the raiders ammunition.” Olds offers the following four-point program as an alternative to further disclosure” (1) Have the…arrow_forward
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