Drake Paper Company sells on terms of net 30. The firm's variable cost ratio is 0.80. a. If annual credit sales are $20 million and its accounts receivable average 15 days overdue, what is Drake's investment in receivables? b. Suppose that, as the result of a recession, annual credit sales decline by 10 percent to $18 million,
Drake Paper Company sells on terms of net 30. The firm's variable cost ratio is 0.80. a. If annual credit sales are $20 million and its accounts receivable average 15 days overdue, what is Drake's investment in receivables? b. Suppose that, as the result of a recession, annual credit sales decline by 10 percent to $18 mill
Please help with the following problem. There are three stages of the audit in which analytical procedures are performed. Identify one of these three stages and discuss the purpose of performing analytical procedures in that stage. Also, indicate whether analytical procedures are required by current professional auditing sta
There are five types of audit tests. List one audit test and describe at least two types of evidence that may be obtained from this test.?
On January 1, 2009, the balance in Great Lakes Co.'s Allowance for Bad Debts account was $5,200. During the year, a total of $3,500 of delinquent accounts receivable were written off as bad debts. The balance in the Allowance for Bad Debts account at December 31, 2009, was $7,300. (a.) What was the total amount of bad debts
How can fictitious revenue be created through the use of false sales to shell companies? Discuss the method and result of committing this fraud.
The operational reviewer typically has multiple personal attributes that make them and mold them into operational reviewer. List and describe at least three and tell why they are positive attributes for the operational reviewer.
Given time and cost constraints of an audit, explain how materiality and audit risk are assessed and applied to make an audit efficient and effective.
Lets say company A is analyzing the following: It costs them 25.5% if they give up a cash discount that is being offered by a supplier. The local bank offers them an annual interest of 14%. What should they do? Take the discount? or Take the local bank's loan of 14%?
Bank Reconciliation - compute Cash account balance and bank statement balance before reconciling items Bronson Co. received its bank statement for the month ending May 31, 2010, and reconciled the statement balance to the May 31, 2010, balance in the Cash account. The reconciled balance was determined to be $18,600. The reconcil
Kodak Produce a Strategic Audit for Kodak. Include IFAS, EFAS, and SFAS tables in Excel format, with narrative and detailed comments and in Word Document file with detailed narrative and comments along with copy of tables from Excel file. Discuss implementation aspects: o Programs o Budgets o Pr
Inc. reported the following amounts shortly before it made its year-end adjustments at June 30, 2005: Sales $425,000 Sales Returns and Allowances 9,000 Cash Discounts 5,000 Accounts Receivable 43,
Given the following errors: The bank recorded a deposit of $200 as $2,000. The company's bookkeeper mistakenly recorded a deposit of $530 as $350. The company's bookkeeper mistakenly recorded a payment of $250 received from a customer as $25 on the bank deposit slip. The bank caught the error and made the deposit for the
20. Why might an auditor use sampling? A. Because testing and entire accounting system is impractical and unnecessary. B. Because the client has not paid for full testing of the financial statements. C. The auditor deems that there is no fraud in a certain area of the business. D. The auditor deems that there is fraud in a c
Describe the methodology for designing tests for the details of balances in accounts payable. How would your methodology impact the rest of the audit?
Bank reconciliation is the process of systematically comparing the cash balance as reported by the bank with the cash balance on the company's books explaining any differences. FORMAT: Balance per bank Balance per book Additions
Additional paid-in capital refers to: A) a firm's retained earnings. B) a firm's treasury stock. C) the difference between the issue price and the par value. D) funds borrowed from a bank or bondholders.
See attached Excel file. Prepare a bank reconciliation based upon the following information. 1. Balance per bank statement on November 30 $20,400 2. Balance per books on November 30 $12,138 3. NSF Check from J. Smith in payment of account $190 4. Collection of $2,500, 4-month, 12% note with a $25 collection fee. No
The field work for the June 30, 2009, audit of Tracy Brewing Company was finished August 19, 2009, and the completed financial statements, accompanied by the signed audit reports, were mailed September 6, 2009. In each of the highly material independent events (a through i), state the appropriate action (1 through 4) for the sit
Produce a Strategic Audit for Kodak. As you produce your Strategic Audit, make sure to include all eight sections. IFAS, EFAS, and SFAS tables are to be presented in Excel format, separate from the rest of the assignment, which is to be written in a Word file. As a reminder, two files are to be submitted: One Excel file (coun
Assume that you have just completed the audit of XYZ Corporation and you are the lead auditor on the assignment. As the lead auditor it is your job to write and prepare the audit report that will be presented to the corporation's CFO, Controller and Internal Audit Manager. They are material in nature and will require an adjusti
What makes audit evidence persuasive? What criteria must all evidence meet in order to be considered persuasive?
Which of the following methods of determining bad debt expense does not properly match expense against revenue? oCharging bad debts with a percentage of sales under the allowance method. oCharging bad debts with a percentage of accounts receivable under the allowance method. oCharging bad debts with an amount deriv
Compare the relationship between the auditor, client, and external users. How do professional standards for CPAs govern these relationships? Thanks for your help here!
At the end of 2008, Tindal Company has accounts receivable of $1,200,000 and an allowance for doubtful accounts of $60,000. On February 28, 2009, Tindal Company determined that the receivable from Fendi Company of $8,000 will not be collected, and management authorized its write-off.
An office of one Big Four firm determines a preliminary estimate of materiality this way: An audit partner: 1. Judges overall materiality for the financial statements taken as a whole to be an amount falling within a range of 5 percent (lower limit) to 8 percent (upper limit) of net income, and 2. Instructs staff to doc
See attached file for suggested format for answers. In connection with the audit of Flowmeter, Inc., for the year ended December 31, 20X0, Hirsch, CPA, is aware that certain events and transactions that took place after December 31, 20X0, but before Hirsch issues his report dated February 8, 20X1, may affect the company's fi
Milwaukee Surgical Supplies, Inc., sells on terms of 3/10, net 30. Gross sales for the year are $1,200,000 and the collections department estimates that 30% of the customers pay on the tenth day and take discounts, 40% pay on the thirtieth (30th) day, and remaining 30% pay, on average, 40 days after the purchase. (Assume 360 da
Adjusting Entries: Data relating to the balances of various accounts affected by adjusting or closing entries appear below. (The entries which caused the changes in the balances are not given.) You are asked to supply the missing journal entries which would logically account for the changes in the account balances. Interest rece
Since an auditor is unable to examine every transaction, it is necessary to determine how many transactions to examine. After completing all the steps of the internal control audit process, the auditor determines a sample of transactions to audit. The statistical use of PPS is one way to determine sample size for certain ac