A CPA firm is engaged to audit the financial statements of Garrison Corporation. The company’s financial statements have never been audited before. The stockholders’ equity section of Garrison Corporation’s balance sheet at year-end follows: Stockholders’ Equity: Capital stock—20,000 shares of $10 par value authorized: 5,500 shares issued and outstanding. 63,800 Capital contributed in excess of par value of capital stock 63,800 Retained earnings 110,000 Total stockholders’ equity $228,800 Founded four years ago, Garrison Corporation has ten stockholders and serves as its own registrar and transfer agent. It has no capital stock subscription contracts in effect. REQUIRED: Prepare the detailed audit program for the examination of the three accounts composing the stockholders’ equity section of Garrison Corporation’s balance sheet. (Do not include in the audit program the verification of the results of the current-year operations).
A CPA firm is engaged to audit the financial statements of Garrison Corporation. The company’s financial statements have never been audited before. The stockholders’ equity section of Garrison Corporation’s balance sheet at year-end follows: Stockholders’ Equity: Capital stock—20,000 shares of $10 par value authorized: 5,500 shares issued and outstanding. 63,800 Capital contributed in excess of par value of capital stock 63,800 Retained earnings 110,000 Total stockholders’ equity $228,800 Founded four years ago, Garrison Corporation has ten stockholders and serves as its own registrar and transfer agent. It has no capital stock subscription contracts in effect. REQUIRED: Prepare the detailed audit program for the examination of the three accounts composing the stockholders’ equity section of Garrison Corporation’s balance sheet. (Do not include in the audit program the verification of the results of the current-year operations).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A CPA firm is engaged to audit the financial statements of Garrison Corporation. The company’s financial statements have never been audited before. The stockholders’ equity section of Garrison Corporation’s balance sheet at year-end follows:
Stockholders’ Equity:
Capital stock—20,000 shares of $10 par value authorized:
5,500 shares issued and outstanding. 63,800
Capital contributed in excess of par value of capital stock 63,800
Total stockholders’ equity $228,800
Founded four years ago, Garrison Corporation has ten stockholders and serves as its own registrar and transfer agent. It has no capital stock subscription contracts in effect.
REQUIRED:
Prepare the detailed audit program for the examination of the three accounts composing the stockholders’ equity section of Garrison Corporation’s balance sheet. (Do not include in the audit program the verification of the results of the current-year operations).
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