Review the attached document. Questions: - What accounts for any noticeable differences between the two? (1 paragraph) - Are both interpretations valid? Why or why not? (1 to 2 paragraphs) - What action change program would you recommend implementing at the Old Family Bank and why? (1 to 2 paragraphs)
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Prepare the bank reconciliation based on the following information; Bogus Company's cash records for April 2004: CASH RECEIPTS (CR) date cash debit check # cash credit april 2 $4,174 3113 $891 8
E11-1 On June 1, Padillio Company borrows $70,000 from First Bank on a 6-month, $70,000, 12% note. Instructions (a) Prepare the entry on June 1. (b) Prepare the adjusting entry on June 30. (c) Prepare the entry at maturity (December 1), assuming monthly adjusting entries have been made through November 30. (d) What was t
What do you consider the easiest type of audit evidence to obtain and why? What do think is the hardest type of evidence to obtain and why?
13-33 (Audit Evidence and Conclusions) The following conclusions were taken from a staff auditor's summary worksheet for fixed assets and the worksheet for prepaid insurance. Audit Conclusions or Situations 1. The choice of eight years for straight-line depreciation of the company's trucks appears unreasonable. I would sugg
16-47 (Selecting the Proper Audit Opinion and Report Modification) Required Audit situations 1 through 8 present various independent factual situations an auditor might encounter in conducting an audit. List A represents the types of opinions the auditor ordinarily would issue, and List B represents the report modificati
CASE 3.1 THE TROLLEY DODGERS In 1890, the Brooklyn Trolley Dodgers professional baseball team joined the National League. Over the following years, the Dodgers would have considerable difficulty competing with the other baseball teams in the New York City area. Those teams, principal among them the New York Yankees, were muc
9.81 Payroll Audit Procedures, Computers, and Sampling. You are the senior auditor in charge of the annual audit of Onward Manufacturing Corporation for the year ending December 31. The company is of medium size, having only 300 employees. All 300 employees are union members paid by the hour at rates set forth in a union contr
12-46 (Overview and Objectives of Audit Procedures) The following represents a critical review of the documentation of a new auditor for the cash and marketable securities audit areas. Several deficiencies are noted; they resulted in significant errors not being initially identified. Required For each item listed as follows:
1. What are the different types of audit reports and when should each be used? 2. In what types of situations would an auditor be allowed to issue an unqualified audit report? 3. To what extent is the auditor liable for misstatements in the financial statements of the audited company.
How can you sustain good longer-term relations with business partners (customers and vendors) in the face of the need to improve cash flow and avoid bank borrowing?
Why do auditors have to consider the internal controls of the organization? What are some key elements of internal control? Which are the most important? How will the auditor have to modify the audit program if the internal controls are deemed inadequate to support management assertions?
7-36 (Classification and Reliability of Audit Evidence) Following are examples of documentation typically obtained by auditors. Required For each example: a. Classify the documentation as internal or external evidence. b. Classify the documentation as to its relative reliability (high, moderate, or low). c. Identify an
4-58 (Audit Assessment of Materiality) The audit report provides reasonable assurance that the financial statements are free from material misstatements. The auditor is put in a difficult situation because materiality is defined from a user viewpoint, but the auditor must assess materiality in planning the audit to ensure that s
Bank lines of credit must be judiciously requested because the lines often: A) accrue interest regardless of whether funds are borrowed. B) require payment of a commitment fee to establish. C) appear as a liability on the firm's balance sheet. D) have a negative impact on the firm's credit history.
What are the components of the audit risk model? How does the audit risk model impact an audit plan?
(1) At January 1, 1993, the credit balance in the Allowance for Doubtful Accounts of Kap Shin Co. was $400,000. For 1993, the provision for doubtful accounts is based on a percentage of net sales. Net sales for 1993 were $70,000,000. On the basis of the latest available facts, the 1993 provision for doubtful accounts is es
Why is monitoring accounts receivable important? What is the best way to monitor it?
Choose a Financial Institution such as a bank in the United States. Select a process within that type of organization that may need improvement. Please address the following deliverables: a) a description of the chosen process b) an as-is flow chart of the process to be analyzed c) describe the relationship of the process to
Weaver, Inc. received a $60,000, six-month, 12% interest -bearing note from a customer. The note was discounted the same day at Third National Bank at 15% Required: Compute the amount of cash received by Weaver from the bank.
A review of the November 30 bank statement and other data of Jones Company reveals the following: 1. Balance per bank statement on November 30 - $20,200 2. Balance per books on November 30 - $14,388 3. NSF Check from J. Smith in payment of account - $220 4. Collection of $3,605 note receivable that had not been re
How could a company get a 'clean' opinion letter from its auditor but still have issues, such as an Enron?
Use the following data for questions 1 and 2 Quinn Company's bank statement at January 31 shows a balance of $13,360, while the ledger account for Cash in Quinn's ledger shows a balance of $12,890 at the same date. The only reconciling items are the following: ? Deposit in transit, $890. ? Bank service charge, $24. ? NSF c
You are considering the choice between investing $50,000 in a conventional one-year bank GIC offering an interest rate of 7% and a one-year inflation-plus GIC offering 3.5% per year plus the rate of inflation. a) Which is the safer (i.e. less risky) investment? b) Which offers the higher expected return? c) If you expect the
A. How much did Merrill Lynch disburse per day to New York State customers? b. What was the total gain to Merrill Lynch over the 28 months, assuming an interest rate of 8 percent? c. What was the present value of the increase in float if the benefits were expected to be permanent? d. Suppose that the use of remote banks had involved Merrill Lynch in extra expenses. What was the maximum extra cost per check that Merrill Lynch would have been prepared to pay?
Float Management. Some years ago, Merrill Lynch increased its float by mailing checks drawn on West Coast banks to customers in the East and checks drawn on East Coast banks to customers in the West. A subsequent class action suit against Merrill Lynch revealed that in 28 months from September 1976 Merrill Lynch disbursed $1.25
What are the implications of having the same person performing accounts payable and accounts receivable functions?
A Company budgeted sales on account for $120,000 for July, $211,000 for August, and $198,000 for September. Collection experience indicates that none of the budgeted sales will be collected in the month of the sale, 60% will be collected the month after the sale, 36% in the second month, and 4% will be uncollectible. The cash re
A firm offers terms of 2/15, net 30. Currently, two-thirdsof all customers take advantage of the trade discount; the remainder pay bills at the due date. .. What will be the firm's typical value for its accounts receivable period? .. What is the average investment in accounts receivable if annual sales are $20 million?
Use the data below from a company's sales for January-June to get a forecast for the collection forecast, including cash sales, for June.
P1-2A Information related to Holland Company for 2002 is summarized below. Total credit sales $2,100,000 Accounts receivable at December 31 840,000 Accounts receivable written off 38,000 Instructions (a) What amount of bad debts expense will Holland Company report if it uses the direct write-off method of accounting for