& 35 00 A4 68 James Duffney, CPA, has randomly selected and audited a sample of 100 of Will-Mart's accounts receivable. Will-Mart has 6.150 accounts receivable accounts with a total book value of $6,000,000. Duffney has determined that the account's tolerable misstatement is $500,000. His sample results are as follows: Average audited value $960 Average book value 968 Required: Calculate the accounts receivable estimated audited value and projected misstatement using the: a. Mean-per-unit method. b. Ratio method. c. Difference method. Complete this question by entering your answers in the tabs below. Required A Required B Required C Calculate the accounts receivable estimated audited value and projected misstatement using the mean-per-unit method. Estimated audited Projected misstatement Required B > 18 of 20 Next > Untitled docume....pdf Untitled docume....pdf Untitled docume....pdf oj....docx Presentation se...pdf MacBook Air 88 F4 114 F8 F6 64 F5 F3 F2 6

& 35 00 A4 68 James Duffney, CPA, has randomly selected and audited a sample of 100 of Will-Mart's accounts receivable. Will-Mart has 6.150 accounts receivable accounts with a total book value of $6,000,000. Duffney has determined that the account's tolerable misstatement is $500,000. His sample results are as follows: Average audited value $960 Average book value 968 Required: Calculate the accounts receivable estimated audited value and projected misstatement using the: a. Mean-per-unit method. b. Ratio method. c. Difference method. Complete this question by entering your answers in the tabs below. Required A Required B Required C Calculate the accounts receivable estimated audited value and projected misstatement using the mean-per-unit method. Estimated audited Projected misstatement Required B > 18 of 20 Next > Untitled docume....pdf Untitled docume....pdf Untitled docume....pdf oj....docx Presentation se...pdf MacBook Air 88 F4 114 F8 F6 64 F5 F3 F2 6

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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7
Assume that you are preparing to confirm accounts receivable at December 31, 2025, which is one month prior to the fiscal year - end of January 31, 2026. The book value of gross accounts receivable is $71,622, 804. Complete the following requirements related to the confirmation of receivables for Cloud 9 based on previous work and the following information Required:a. Using PPS sampling, determine the sample size that you want to use for sending accounts receivable confirmations. You make the following assumptions.You set tolerable misstatement for accounts receivable at $3,500,000. Expected misstatement = $750,000. Risk of incorrect acceptance = 37%. Given these parameters: 1. What do you calculate for sample size? 2. What do you calculate for the sampling interval?
In your audit of ABC Co., you noted that the company's balance sheet shows the accounts receivable balance at December 31, 2005 as follows:Accounts receivable P3,600,000Allowance for doubtful accounts 72,000During 2006, transactions relating to the accounts were as follows:• Sales on account, P38,400,000.• Cash received from collection of current receivable totaled P31,360,000, afterdiscount of P640,000 were allowed for prompt payment.• Customers' accounts of P160,000 were ascertained to be worthless and were written off.• Bad accounts previously written off prior to 2005 amounting to P40,000 were recovered.• The company decided to provide P184,000 for doubtful accounts by journal entry at the end of the year.• Accounts receivable of P5,600,000 have been pledged to a local bank on a loan of P3,200,000. Collections of P1,200,000 were made on these receivables (not included in the collections previously given) and applied as partial payment to the loan.1. The accounts receivable as of…
32. In the course of our audit of Ettedanreb Corporation’s cash in bank for the year ended December 31, 2016, you ascertained the following information: November 30 December 31 Cash per book 60,350 ? Cash per bank statement 535,410 689,085 Undeposited checks 41,005 64,400 Outstanding checks 138,590 150,560 Bank service charges 3,600 3,000 Insufficient fund check 41,250 Company’s notes receivable collected by bank 359,075 404,500 The bank statement and the company’s records show the following totals: Cash disbursements per bank statement 1,091,865 Cash receipts per cash records ? Cash disbursements per cash records ? Cash receipts per bank statement 1,245,540 Additional information: The insufficient fund check was redeposited…
Upper Limit on Misstatements Calculation: Monetary Unit Sampling. The auditorsmailed positive confirmations on 60 customers’ accounts receivable balances. The company’saccounts receivable balance comprised 2,356 customer accounts with a total recorded balanceof $19,600,000, and the sampling interval was $280,000. The auditors received four positiveconfirmation returns reporting exceptions. Upon follow-up, they found the following:∙ Account 2333. Recorded balance $8,345. The account was overstated by $1,669 becausethe client made an arithmetic mistake recording a credit memo. The company issued only86 credit memos during the year. The auditors examined all of them for the same arithmetic mistake and found no similar misstatements.∙ Account 363. Recorded balance $7,460. The account was overstated by $1,865 because thecompany sold merchandise to a customer with payment due in six months plus 15 percentinterest. The billing clerk made a mistake and recorded the sales price and the…
The following information is provided for the audit of Vial-tech. Performance materiality is twice the amount of materiality. There are no other misstatements other than those indicated. Account Accounts receivable Inventory Fixed assets All other accounts (net) Net assets $5,000 $20,000 $25,000 Amount $45,000 1,000,000 2,500,000 2,000,000 1,500,000 7,000,000 Performance Materiality Amount includes projected misstatement and allowance for sampling risk: In testing accounts receivable, the auditor tested $200,000 of receivables and found $5,000 of misstatements. The direct projected misstatement in accounts receivable excluding sampling risk is: O Insufficient information to determine. 40,000 60,000 10,000 40,000 150,000 Estimated Misstatements Overstating Income 45,000 10,000 5,000 5,000
QC 34.
During the bank reconciliation process at Fontes & Barone Consulting, LLP, on May 2, 20X1, the following two errors were discovered in the firm's records. a. The checkbook and the general journal indicated that Check 2206 dated April 17 was issued for $696 to make a cash purchase of supplies. However, examination of the canceled check and the listing on the bank statement showed that the actual amount of the check was $96. b. The checkbook and the general journal indicated that Check 2247 dated April 20 was issued for $140 to pay a utility bill. However, examination of the canceled check and the listing on the bank statement showed that the actual amount of the check was $410. Required: 1. Prepare the adjusted book balance section of the firm's bank reconciliation statement as of April 30, 20X1. The book balance as of April 30 was $25,275. The errors listed above are the only two items that affect the book balance. 2. Prepare general journal entries to correct the errors. Check 2206…
The information below was taken from the bank transfer schedule prepared during the audit of Fox Co.'s financial statements for the year ended December 31, 2005. Assume all checks are dated and issued on December 30, 2005. Check No. 101 202 303 404 Bank Accounts From National Federal County State Federal American Dec. 31 State Republic Jan. 2 To Disbursement Date Per Books Per Bank Dec. 30 Jan. 4 Jan. 2 Jan. 3 Jan. 3 Jan. 2 Receipt Date Per Books Dec. 30 Dec. 30 Jan. 2 Jan. 2 Per Bank Jan. 3 Dec. 31 Which of the following checks illustrate deposits/transfers in transit at December 31, 2005? Jan. 2 Dec. 31
Sample Size Determination: Monetary Unit Sampling. The recorded accounts receivable balance for Warner Company was $500,000.Required:For each of the following independent sets of conditions, determine the appropriate samplesize for the examination of Warner’s accounts receivable in MUS. Based on the differencesin your calculations, identify the general relationship between different factors and samplesize. (RIA = risk of incorrect acceptance, TM = tolerable misstatement, EM = expectedmisstatement).a. RIA = 5%, TM = $50,000, EM = $10,000.b. RIA = 5%, TM = $50,000, EM = $25,000.c. RIA = 10%, TM = $50,000, EM = $10,000.d. RIA = 10%, TM = $50,000, EM = $25,000.