Auditing and Assurance Services (16th Edition)
Auditing and Assurance Services (16th Edition)
16th Edition
ISBN: 9780134065823
Author: Alvin A. Arens, Randal J. Elder, Mark S. Beasley, Chris E. Hogan
Publisher: PEARSON
Question
Book Icon
Chapter 24, Problem 29DQP

a)

To determine

Prepare an unadjusted misstatement audit schedule in the given situation.

b)

To determine

Provide the conclusion regarding the financial statements in case, the audit findings are not corrected by the Management of W prior to issue of the audit report.

Blurred answer
Students have asked these similar questions
Due to rapid employee turnover in the accounting department, the following transactions involving intangible assets were improperly recorded by Metlock Corporation. 1. 2. Metlock developed a new manufacturing process, incurring research and development costs of $129,000. The company also purchased a patent for $67,000. In early January, Metlock capitalized $196,000 as the cost of the patents. Patent amortization expense of $9,800 was recorded based on a 20-year useful life. On July 1, 2022, Metlock purchased a small company and as a result recorded goodwill of $81,000. Metlock recorded a half- year's amortization in 2022, based on a 20-year life ($2,025 amortization). The goodwill has an indefinite life. Prepare all journal entries necessary to correct any errors made during 2022. Assume the books have not yet been closed for 2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account…
During the year-end audit of Cressman Corporation's financial statements for 2016, you discover the following items: 1. Cressman capitalized $57,000 to the Patent account at the beginning of 2015 for the cost of a patent. This amount included $50,000 of R&D costs. The patent was amortized over a 20-year life in 2015 and 2016. 2. At the beginning of 2015, Cressman paid its lawyers $8,000 to successfully defend a patent infringement suit regarding the patent in Item 1. Cressman debited this cost to Legal Fees Expense. 3. At the beginning of 2016, Cressman purchased a patent for $30,000 from Baylor Company to prevent potential competition. It recorded the cost in the Patent account and amortized this cost over the remaining legal life of the patent obtained in Item 1 (19 years). However, Cressman agreed to a suggestion by the auditors that the life of the original patent obtained in Item 1 was protected for only 7 more years as of the beginning of 2016. Required: Prepare adjusting and…
Due to rapid turnover in the accounting department, a number of transactions involving intangible assets were improperly recorded by Goins Company in 2017. 1.   Goins developed a new manufacturing process, incurring research and development costs of $136,000. The company also purchased a patent for $60,000. In early January, Goins capitalized $196,000 as the cost of the patents. Patent amortization expense of $19,600 was recorded based on a 10-year useful life. 2.   On July 1, 2017, Goins purchased a small company and as a result acquired goodwill of $92,000. Goins recorded a half-year’s amortization in 2017, based on a 50-year life ($920 amortization). The goodwill has an indefinite life. Prepare all journal entries necessary to correct any errors made during 2017. Assume the books have not yet been closed for 2017
Knowledge Booster
Background pattern image
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
FINANCIAL ACCOUNTING
Accounting
ISBN:9781259964947
Author:Libby
Publisher:MCG
Text book image
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Text book image
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Text book image
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Text book image
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Text book image
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education