EP AUDITING+ASSURANCE...-MYACCT.LAB
16th Edition
ISBN: 9780134148656
Author: ARENS
Publisher: PEARSON CO
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Question
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.
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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.
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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
3) b) During the audit, the team has identified the following errors: profit before tax for PSG is estimated at
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i.
An error of $350,000 in the valuation of work in progress was found as a number of the assumptions
contain out of date information. The management of PSG have indicated that they do not wish to amend the
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Due to rapid employee turnover in the accounting department, the following transactions involving intangible assets were improperly
recorded by Metlock Corporation.
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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
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Chapter 24 Solutions
EP AUDITING+ASSURANCE...-MYACCT.LAB
Ch. 24 - Prob. 1RQCh. 24 - Explain why an auditor is interested in a clients...Ch. 24 - Prob. 3RQCh. 24 - Prob. 4RQCh. 24 - Prob. 5RQCh. 24 - Prob. 6RQCh. 24 - Prob. 7RQCh. 24 - Prob. 8RQCh. 24 - What major considerations should the auditor take...Ch. 24 - Identify five audit procedures normally done as a...
Ch. 24 - Prob. 11RQCh. 24 - Prob. 12RQCh. 24 - Prob. 13RQCh. 24 - Prob. 14RQCh. 24 - Prob. 15RQCh. 24 - Prob. 16RQCh. 24 - Prob. 17RQCh. 24 - Prob. 18.1MCQCh. 24 - Prob. 18.2MCQCh. 24 - Prob. 18.3MCQCh. 24 - Prob. 18.4MCQCh. 24 - Prob. 19.1MCQCh. 24 - Prob. 19.2MCQCh. 24 - Prob. 19.3MCQCh. 24 - Prob. 20.1MCQCh. 24 - Prob. 20.2MCQCh. 24 - Prob. 20.3MCQCh. 24 - Prob. 21.1MCQCh. 24 - Prob. 21.2MCQCh. 24 - Prob. 21.3MCQCh. 24 - Prob. 22DQPCh. 24 - In an audit of the Marco Corporation as of...Ch. 24 - Prob. 24DQPCh. 24 - The field work for the June 30, 2016, audit of...Ch. 24 - Prob. 26DQPCh. 24 - Prob. 27DQPCh. 24 - Prob. 28DQPCh. 24 - Prob. 29DQPCh. 24 - Prob. 30DQP
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