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Question:45 Before issuing a report on the compilation of financial statements of a nonpublic entity, the accountant should:a. Apply analytical procedures to selected financial data to discover any material misstatements. b. Corroborate at least a sample of the assertions management has embodied in the financial statements. c. Inquire of the client's personnel whether the financial statements omit substantially all disclosures. d. Read the financial statements to consider whether the financial statements are free from obvious material errors. Kaffen Company, a ski tuning, and repair shop, opened on November 1, 2013. The company carefully kept track of all its cash receipts and cash payments. The following information is available at the end of the ski season, April 30, 2014. Issuance of common shares Payment to purchase repair shop equipment Rent payments Newspaper advertising payment Cash Receipts Cash Payments $ 22,000 $9,100 1,260 370 Utility bill payments 920 Part-time helper's wage payments 2,900 Income tax payment 10,200 Cash receipts from ski and snowboard repair 31,830 services Subtotals 53,830 24,750 Cash balance 29,080 Totals $53,830 $53,830 The repair shop equipment was purchased on November 1 and has an estimated useful life of 5 years. The company rents space at a cost of $180 per month on a one-year lease. The lease contract requires payment of the first and last months' rent in advance, which was done. The part- time helper is owed $530 on April 30, 2014, for unpaid wages. On April 30, 2014, customers owe Kaffen Company $480 for services they have received but have not yet paid for.1. Prepare an accrual-basis income statement for the 6 months ended April 30, 2014.2. Prepare April 30, 2014, classified balance sheet.

Question:45 Before issuing a report on the compilation of financial statements of a nonpublic entity, the accountant should:a. Apply analytical procedures to selected financial data to discover any material misstatements. b. Corroborate at least a sample of the assertions management has embodied in the financial statements. c. Inquire of the client's personnel whether the financial statements omit substantially all disclosures. d. Read the financial statements to consider whether the financial statements are free from obvious material errors. Kaffen Company, a ski tuning, and repair shop, opened on November 1, 2013. The company carefully kept track of all its cash receipts and cash payments. The following information is available at the end of the ski season, April 30, 2014. Issuance of common shares Payment to purchase repair shop equipment Rent payments Newspaper advertising payment Cash Receipts Cash Payments $ 22,000 $9,100 1,260 370 Utility bill payments 920 Part-time helper's wage payments 2,900 Income tax payment 10,200 Cash receipts from ski and snowboard repair 31,830 services Subtotals 53,830 24,750 Cash balance 29,080 Totals $53,830 $53,830 The repair shop equipment was purchased on November 1 and has an estimated useful life of 5 years. The company rents space at a cost of $180 per month on a one-year lease. The lease contract requires payment of the first and last months' rent in advance, which was done. The part- time helper is owed $530 on April 30, 2014, for unpaid wages. On April 30, 2014, customers owe Kaffen Company $480 for services they have received but have not yet paid for.1. Prepare an accrual-basis income statement for the 6 months ended April 30, 2014.2. Prepare April 30, 2014, classified balance sheet.

Auditing: A Risk Based-Approach (MindTap Course List)
Auditing: A Risk Based-Approach (MindTap Course List)
11th Edition
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Chapter14: Completing A Quality Audit
Section: Chapter Questions
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Question:45 Before issuing a report on the compilation of financial statements of a nonpublic entity, the accountant should:a. Apply analytical procedures to selected financial data to discover any material misstatements. b. Corroborate at least a sample of the assertions management has embodied in the financial statements. c. Inquire of the client's personnel whether the financial statements omit substantially all disclosures. d. Read the financial statements to consider whether the financial statements are free from obvious material errors. Kaffen Company, a ski tuning, and repair shop, opened on November 1, 2013. The company carefully kept track of all its cash receipts and cash payments. The following information is available at the end of the ski season, April 30, 2014. Issuance of common shares Payment to purchase repair shop equipment Rent payments Newspaper advertising payment Cash Receipts Cash Payments $ 22,000 $9,100 1,260 370 Utility bill payments 920 Part-time helper's wage payments 2,900 Income tax payment 10,200 Cash receipts from ski and snowboard repair 31,830 services Subtotals 53,830 24,750 Cash balance 29,080 Totals $53,830 $53,830 The repair shop equipment was purchased on November 1 and has an estimated useful life of 5 years. The company rents space at a cost of $180 per month on a one-year lease. The lease contract requires payment of the first and last months' rent in advance, which was done. The part- time helper is owed $530 on April 30, 2014, for unpaid wages. On April 30, 2014, customers owe Kaffen Company $480 for services they have received but have not yet paid for.1. Prepare an accrual-basis income statement for the 6 months ended April 30, 2014.2. Prepare April 30, 2014, classified balance sheet.
Transcribed Image Text:Question:45 Before issuing a report on the compilation of financial statements of a nonpublic entity, the accountant should:a. Apply analytical procedures to selected financial data to discover any material misstatements. b. Corroborate at least a sample of the assertions management has embodied in the financial statements. c. Inquire of the client's personnel whether the financial statements omit substantially all disclosures. d. Read the financial statements to consider whether the financial statements are free from obvious material errors. Kaffen Company, a ski tuning, and repair shop, opened on November 1, 2013. The company carefully kept track of all its cash receipts and cash payments. The following information is available at the end of the ski season, April 30, 2014. Issuance of common shares Payment to purchase repair shop equipment Rent payments Newspaper advertising payment Cash Receipts Cash Payments $ 22,000 $9,100 1,260 370 Utility bill payments 920 Part-time helper's wage payments 2,900 Income tax payment 10,200 Cash receipts from ski and snowboard repair 31,830 services Subtotals 53,830 24,750 Cash balance 29,080 Totals $53,830 $53,830 The repair shop equipment was purchased on November 1 and has an estimated useful life of 5 years. The company rents space at a cost of $180 per month on a one-year lease. The lease contract requires payment of the first and last months' rent in advance, which was done. The part- time helper is owed $530 on April 30, 2014, for unpaid wages. On April 30, 2014, customers owe Kaffen Company $480 for services they have received but have not yet paid for.1. Prepare an accrual-basis income statement for the 6 months ended April 30, 2014.2. Prepare April 30, 2014, classified balance sheet.
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