Auditing And Assurance Services
17th Edition
ISBN: 9780134897431
Author: ARENS, Alvin A.
Publisher: PEARSON
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Question
Chapter 7, Problem 37DQP
a.
To determine
Determine the expected value from the given information.
a.
Expert Solution
Explanation of Solution
Audit Evidence: The piece of evidence provided by the audit team to prove their opinion with respect to the audit is known as audit evidence. It includes accounting information related to the evidence and their source.
Determine the expected value.
| Account | Expected value |
| Executive salaries | |
| Factory hourly payroll |
Increase due to 3% pay rate increase: Increase due to 8% increased production: |
| Factory supervisors’ salaries | |
| Office salaries | |
| Sales commissions |
Increase in commissions due to increased sales: |
Table (1)
b.
To determine
Compute the difference between the own expectation and client’s recorded amounts as percentage.
b.
Expert Solution
Explanation of Solution
Compute the difference between the expectation and client’s recorded amounts as percentage.
| Account | DIFFERENCEIN EXPECTEDAND RECORDED |
| Executive salaries | |
| Factory hourly payroll | |
| Factory supervisors’ salaries | |
| Office salaries | |
| Sales commissions |
Table (2)
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You are auditing payroll for the Morehead Technologiescompany for the year ended October 31, 2013. Included next are amounts from the client’strial balance, along with comparative audited information for the prior year.Audited Balance Preliminary Balance10/31/2012 10/31/2013Sales $ 51,316,234 $ 57,474,182Executive salaries 546,940 615,970Factory hourly payroll 10,038,877 11,476,319Factory supervisors’ salaries 785,825 810,588Office salaries 1,990,296 2,055,302Sales commissions 2,018,149 2,367,962You have obtained the following information to help you perform preliminary analyticalprocedures for the payroll account balances.1. There has been a significant increase in the demand for Morehead’s products. Theincrease in sales was due to both an increase in the average selling price of 4 percentand an increase in units sold that resulted from the increased demand and an increasedmarketing effort.2. Even though sales volume increased there was no addition of executives, factorysupervisors,…
You have been recently hired as an assistant controller for XYZ Industries, a large, publically held manufacturing company. Your immediate supervisor is the controller who also reports directly to the VP of Finance. The controller has assigned you the task of preparing the year-end adjusting entries. In the receivables area, you have prepared an aging accounts receivable and have applied historical percentages to the balances of each of the age categories. The analysis indicates that an appropriate estimated balance for the allowance for uncollectible accounts is $180,000. The existing balance in the allowance account prior to any adjusting entry is a $20,000 credit balance.
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Chapter 7 Solutions
Auditing And Assurance Services
Ch. 7 - Prob. 1RQCh. 7 - Prob. 2RQCh. 7 - Prob. 3RQCh. 7 - Prob. 4RQCh. 7 - Prob. 5RQCh. 7 - Prob. 6RQCh. 7 - Prob. 7RQCh. 7 - Prob. 8RQCh. 7 - Prob. 9RQCh. 7 - Prob. 10RQ
Ch. 7 - Prob. 11RQCh. 7 - Prob. 12RQCh. 7 - Prob. 13RQCh. 7 - Prob. 14RQCh. 7 - Prob. 15RQCh. 7 - Prob. 16RQCh. 7 - Prob. 17RQCh. 7 - Prob. 18RQCh. 7 - Prob. 19RQCh. 7 - Prob. 20RQCh. 7 - Define what is meant by a tick mark. What is its...Ch. 7 - Prob. 22RQCh. 7 - Prob. 23.1MCQCh. 7 - Prob. 23.2MCQCh. 7 - Prob. 23.3MCQCh. 7 - Prob. 24.1MCQCh. 7 - Prob. 24.2MCQCh. 7 - Prob. 24.3MCQCh. 7 - Prob. 25.1MCQCh. 7 - Prob. 25.2MCQCh. 7 - Prob. 25.3MCQCh. 7 - Prob. 26.1MCQCh. 7 - Prob. 26.2MCQCh. 7 - Prob. 26.3MCQCh. 7 - Prob. 27DQPCh. 7 - Prob. 28DQPCh. 7 - Prob. 29DQPCh. 7 - Prob. 30DQPCh. 7 - Prob. 31DQPCh. 7 - Prob. 32DQPCh. 7 - Prob. 33DQPCh. 7 - Prob. 34DQPCh. 7 - Prob. 36DQPCh. 7 - Prob. 37DQPCh. 7 - Prob. 40DQP
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