On April 1, 2020, you were hired by Binus Inc., a closely held company, as a staff member of its newly created internal auditing department. While reviewing the company’s records for 2018 and 2019, you discover that no adjustments have yet been made for the items listed below: Required: Explain the problems for each items and prepare journal entries showing the adjustments that are required!
Q: Assume that Smith & Smith, CPAs, audited Apollo Shoes Inc., last year. Now CEO Larry Lancaster…
A: AOW is the new auditor and according to auditing standard, it is required to contact predecessor…
Q: a) Jane cannot find in the statutory books evidence that statutory accounts have been filed with the…
A: a If no accounts are found, then the tax return will be a problem
Q: Key note from review of director meeting minutes: The chairman observed that in recent…
A: As per the review of the director, there is the problem of limitation of scope and if there is any…
Q: You have been engaged to examine the financial statements of Tupac Corporation for the year 2023.…
A: Note: Hi! Thank you for the question As per the honor code, We’ll answer the first question since…
Q: You are the manager responsible for the audit of Kicap Manis Berhad, a listed company, for the year…
A: Part a) The possible impact towards the company and suggest the relevant recommendation for each…
Q: What is the purpose of the communication between the successor and the predecessor auditor? b. How…
A:
Q: board of directors of Danson Company limited asked Jameel & Soften, a Private Auditing Firm to audit…
A:
Q: Mirrabella Pty Ltd has completed the preparation of its financial statements for 2020/2021, but it…
A: The income statement is one of three financial statements that stock investors rely on besides the…
Q: Stewart Jones is reviewing the results of the subsequent events audit procedures. Stewart is writing…
A: Subsequent events are the events occurring after the balance sheet date but before the financial…
Q: You are the audit senior on the audit of PXT Ltd for the year ended 31 January 2020. A former…
A: An auditor is a person or a group of people who is responsible for conducting an audit of the…
Q: Stewart Jones is reviewing the results of the subsequent events audit procedures. Stewart is writing…
A: Subsequent event The events that occur before issuing the financial statement but after the…
Q: You are a new staff member of Monet & Associates, a mid-sized accounting firm and have been assigned…
A: Overall objective of audit is to form a reasonable opinion but without a proper planning the overall…
Q: You are assigned to do the audit the work for Howard Ltd for the calendar year 2019, you found some…
A: Liability is the amount which the person or company owes to outsiders. Liabilities are recorded in…
Q: You are the audit manager of Matfine & Co and are reviewing the key issues identified in the files…
A: "Since you have asked multiple questions, we will solve the first question for you. In order to get…
Q: Stewart Jones is reviewing the results of the subsequent events audit procedures. Stewart is writing…
A: a) Issuance of shares through a private placement offer becomes a part of the Type 2 event. This is…
Q: You are the audit partner at Smart Auditors Inc. For the month of April 2020, you have received the…
A: Matter 1 (6)- In the first matter as the auditor have evidence with the value of inventory which is…
Q: You are the audit manager of Matfine & Co and are reviewing the key issues identified in the files…
A: Here discuss about the Auditors further proceeds to resolve the issues which are pertained with both…
Q: You are the in-charge auditor for the Nelson Company engagement for the year ending December 31,…
A: Auditing means that the facts and figure of financial statements are true and correct or wrong as…
Q: For each of the assertions of occurrence, completeness and accuracy, identify a procedure(s) you…
A: Auditor procedures are those procedures that are used to obtain the relevant evidences. It assists…
Q: The 2021 financial statement audit of OMG company began when the trial balance was received from…
A: Answer: Case given is that is to audit the accounts payable of entity. The schedule of liabilities…
Q: During your review of the audit field work completed by a new junior employee of the audit firm,…
A: Sample audit: It is a method of auditing in which a sample is being selected by considering the…
Q: While completing your audit work for the 30 June 2019 audit of Greenfield Ltd, you become aware of…
A: Step 1 An audit report is a written opinion of an auditor regarding an entity's financial…
Q: Jonathan Ewing is auditing the financial statements of California Company for the year ended…
A:
Q: he board of directors of Danson Company limited asked Jameel & Soften, a Private Auditing Firm to…
A: SAS (Statement on auditing standards) No 84 issued by Accounting standard Board requires…
Q: You are conducting an audit on your client's revenue cycle for the 2019 financial year. Your client…
A: Cut-off indicates that events and transactions have been recorded at the appropriate accounting…
Q: Stewart Jones is reviewing the results of the subsequent events audit procedures. Stewart is writing…
A: a. This is a subsequent event because the issue of the private placement will occur before the date…
Q: The 2021 financial statement audit of OMG company began when the trial balance was received from…
A: SOLUTION If during audit auditor realise that differences is exceed materiality threshold then audit…
Q: AJ Kumar is completing the December 31, 2020, audit of Kiwi Company. As part of the final…
A: Auditor - An auditor is a person or firm appointed by the company to carry out audit of financial…
Q: As the recently appointed auditor for Bramble Corporation, you have been asked to examine selected…
A: Financial transactions are initially recorded in the form of journal entries.
Q: a. For every of the problem above, explain the feasible impact in the direction of the enterprise…
A: Part a) The possible impact towards the company and suggest the relevant recommendation for each…
Q: For the following independent events, assume that each has a material effect on the financial…
A: An audit of financial statements is an examination conducted by an independent auditor on the…
Q: 3. On August 29, 2020, Mar Bonafe, CPA, was offered and accepted the engagement to audit the annual…
A: Auditor should have no bonafide interest in the organization under audit.
Q: Ms. Fatema started his auditing service for various types of companies in the year 2020. Can you…
A: Audit Risk- Audit risk is available whenever auditor is doing audit of any company due to inherent…
Q: You are an audit supervisor of Ali & Babs partners and you are planning the audit of Little Angel…
A: Audit risk would be described as "the risk that perhaps the auditor may issue an incorrect audit…
Q: 1. Define materiality and determine how the level of materiality is assessed.
A: Note: As per policy we don't answer multiple question on single submission, thus the first question…
Q: lopers. Required (a) Identify and explain the significant threats to potential ethical problems in…
A: Material errors are detected during the time of Auditing by the auditor by following steps Evaluate…
Q: In 2019, NMD Inc. tapped you to audit its financial statements for the first time. You completed the…
A: Audited income for 2019 = P1,600,000 The audited income is calculated by making all the adjustments…
Q: The 2021 financial statement audit of OMG company began when the trial balance was received from…
A: Answer: Given case: The schedule of liabilities to vendor showed that the company has only five…
Q: Stewart Jones is reviewing the results of the subsequent events audit procedures. Stewart is writing…
A: A subsequent event can be defined as an event which occurs after the date of account closing but…
Q: wn website. The website was upgraded during the year at a cost of GH¢1·1m. Additionally, the company…
A: Financial risk: Cost of website and warehouse C4.3 million, this was responded by issuing $5 million…
Q: Neon Company, a CPA firm, conducted an audit for the 2020 financial statements of Gold Corporation.…
A: Audit procedures refers to as the techniques, methodology, and processes that auditors performs in…
Q: million and inventory of $625,000. Required: Recommend ONE procedure the audit team should…
A: audit procedures are the processes methods and other techniques that applied by Auditor in order to…
Q: Stewart Jones is reviewing the results of the subsequent events audit procedures. Stewart is writing…
A: A subsequent event can be defined as an event which occurs after the date of account closing but…
Q: You have recently been appointed as the external auditor of Hope-well Limited, a manufacturer of…
A: Identify and explain SIX audit risks that exist in the audit of Hope-well Limited The first is…
Q: is ready to merge with a competitor. If correct, this may have disclosure implications. Management…
A: 1 Purpose of a management representation letter A management representation letter was issued by…
Q: In an audit of Malakat Mall Hypermarket for the financial year ended 30 June 2020, you discovered…
A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…
Q: In 2019, NMD Inc. tapped you to audit its financial statements for the first time. You completed the…
A: Note : (1) Since no specific information is given, it has been assumed that, Salesmen's commission…
On April 1, 2020, you were hired by Binus Inc., a closely held company, as a staff member of its newly created internal auditing department. While reviewing the company’s records for 2018 and 2019, you discover that no adjustments have yet been made for the items listed below:
Required:
Explain the problems for each items and prepare
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 5 images
- On April 1, 2021, Metro Co. purchased machinery at a cost of $42,000. The machinery is expected to last 10 years and to have a residual value of $6,000. Required: Compute depreciation for 2021 (for 9 months, 4/1/21 ~ 12/31/21) assuming the sum-of-the-years'-digits method is used. No credit if no computation is shown.On January 1, 2020, Star Inc. purchased equipment for the new plant. The company paid $354,000 for the new equipment. Assume the company uses the double-declining balance method to depreciate the equipment and that the machines have an expected useful life of 4 years with no residual value. Do not enter dollar signs or commas in the input boxes. Round all answers to the nearest whole dollar. a) Prepare the following schedule to record the depreciation expense, accumulated depreciation and net book value for the 4 years. Accumulated Beginning of Depreciation Net Book Year Depreciation to Year Book Value Expense Value Date 2020 2021 2022 2023 b) Give the journal entry to record depreciation expense at the end of 2021. Date Description Debit Credit Dec 31 To record depreciation expense for 2021On January 1, 2019, Uptown Builders purchased a machine for $200,000. Uptown's policy is to depreciate this type of machinery using straight-line depreciation, over five years, with no residual value. Because of a bookkeeping error, no depreciation was recognized in Uptown's 2019 or 2020 financial statements. The error was discovered during the preparation of the 2021 financial statements. Ignoring income taxes, the impact of this error on retained earnings prior to any 2021 adjustments is: Question 8 options: Overstatement of $80,000 Understatement of $120,000 Understatement of $80,000 Overstatement of $120,000
- Colorado Company has been using the sum-of-the-years'-digits depreciation method to depreciate some office equipment that was acquired at the beginning of 2019. At the beginning of 2021, Colorado Consulting decided to change to the straight-line method. The equipment cost $120,000 and is expected to have no salvage value. The estimated useful life of the equipment is five years. Ignore income taxes. Required: Prepare the journal entry to record depreciation for 2021. No credit if no computation is shown.At December 31, 2020, the following existed on the records of DRA Co.: Fixed Assets: $86,000 Accumulated Depreciation: $39,700 Fixed assets purchased during the year cost $180,000. During the year ended September 30,2021, fixed assets with a written down value of $37,000 was sold for $49,000. The plant had original cost of $80,000. It is the company's policy to charge a full year's depreciation in the year of acquisition of an asset and none in the year of sale. DRA uses 10% rate on a straight-line basis. What net amount (book value) should appear in the statement of financial position as of September 30, 2021 for fixed assets?While reviewing the company’s records for 2019 and 2020, Ms. Croft discovered that no adjustments were made for the following items. Interest income of $14,100 was not accrued at the end of 2019. It was recorded when received in February 2020. A computer costing $4000 was expensed when purchased on July 1, 2019. It is expected to have a 4 year life with no residual value. The company typically uses straight line depreciation for all fixed assets. Research costs of $33,000 were incurred early in 2019. They were capitalized and were to be amortized over a 3-year period. Amortization of $11,000 was recorded for 2019 and $11,000 for 2020. On January 2, 2019, Jolie Inc. leased a building for 5 years at a monthly rental of $8,000. On that date, the company paid the following amounts, which were expensed when paid. Security deposit $20,000 First month’s rent 8,000 Last month’s rent 8,000 $36,000 5. The company received $36,000 from a customer at the beginning of 2019 for…
- In 2022, internal auditors discovered that Fay, Inc., had debited an expense account for the $2,640,000 cost of a machine purchased on January 1, 2019. The machine's useful life was expected to be 16 years with no residual value. Straight-line depreciation is used by Fay. The journal entry to correct the error will include a credit to accumulated depreciation of. A) $495,000. B) $2,145,000. $330,000. $165,000.Holt Developments Ltd. put an asset in service on January 1, 2021. Its cost was $432,000, its predicted service life was six years, and its expected residual value was $43,200. The company decided to use double-declining-balance depreciation. After consulting with the company’s auditors, management decided to change to straight-line depreciation in 2023, without changing either the original service life or residual value.Required:a. What is depreciation expense for 2023? b. Calculate the effect of this change on retained earnings.At December 31, 2020, the following existed on the records of BULGOGI Co.: Fixed Assets: $86,000 Accumulated Depreciation: $39,700 Fixed assets purchased during the year cost $180,000. During the year ended September 30,2021, fixed assets with a written down value of $37,000 was sold for $49,000. The plant had original cost of $80,000. It is the company's policy to charge a full year's depreciation in the year of acquisition of an asset and none in the year of sale. DRA uses 10% rate on a straight-line basis. What net amount (book value) should appear in the statement of financial position as of September 30, 2021 for fixed assets?
- In 2024, internal auditors discovered that PKE Displays, Incorporated, had debited an expense account for the $356,000 cost of equipment purchased on January 1, 2021. The equipment's life was expected to be five years with no residual value. Straight-line depreciation is used by PKE. Required: 1. Determine the cumulative effect of the error on net income over the three-year period from 2021 through 2023, and on retained earnings by the end of 2023. 2. Prepare the correcting entry, assuming the error was discovered in 2024 before the adjusting and closing entries. (Ignore income taxes.) 3. Assume instead that the equipment was disposed of in 2025 and the original error was discovered in 2026 after the 2025 financial statements were issued. Prepare the correcting entry in 2026. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Determine the cumulative effect of the error on net income over the three-year period from 2021 through 2023, and on…Tracy Ltd. purchased a piece of equipment on January 1, 2016, for $1,260,000. At that time, it was estimated that the machine would have a 15-year life and no residual value. On December 31, 2020, Tracy’s controller found that the entry for depreciation expense was omitted in error in 2017. In addition, Tracy planned to switch to double-declining-balance depreciation because of a change in the pattern of benefits received, starting with the year 2020. Tracy currently uses the straight-line method for depreciating equipment. Prepare the general journal entries, if any, the accountant should make at December 31, 2020. (Ignore tax effects.) (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round the rate of deprecition under double decling balance method to 5 decimal places, ie. 13.33333%. Round answers to 0 decimal places, e.g. 5,125.)…Dove Ltd purchased new equipment on 1 July 2016, at a cost of $500,000. The company estimated that the equipment has a residual value of $80,000. The equipment is expected to be used for 6 years. Required: Assuming the financial year ends on 30 June, calculate the depreciation expense using sum-of-years digit methods for years ended 2018 to 2020. Please show the calculation of the sum-of-years digit and depreciable amount. Note: The depreciation table is not required.