The following additional information is obtained from independent sources and the client’s records as a means of investigating the controller’s explanations: Jones Drugs ($ in thousands) Industry Gross _ Drug Sales Non-drug sale Drug cost of sales Non-drug cost of sale Industry Gross Profit Percent for Retailers of Drugs and Related Products 2011 5,126 9,085 3,045 6,178 32.7 2010 5,051 7,865 2,919 5,347 32.9 2009 4,821 6,641 2,791 4,522 33.0 2008 4,619 5,732 2,665 3,908 33.2 Evaluate the explanation provided by Adams. Show calculations to support your conclusions. Which specific aspects of the client’s financial statements require intensive investigation in this audit?
The following additional information is obtained from independent sources and the client’s records as a means of investigating the controller’s explanations: Jones Drugs ($ in thousands) Industry Gross _ Drug Sales Non-drug sale Drug cost of sales Non-drug cost of sale Industry Gross Profit Percent for Retailers of Drugs and Related Products 2011 5,126 9,085 3,045 6,178 32.7 2010 5,051 7,865 2,919 5,347 32.9 2009 4,821 6,641 2,791 4,522 33.0 2008 4,619 5,732 2,665 3,908 33.2 Evaluate the explanation provided by Adams. Show calculations to support your conclusions. Which specific aspects of the client’s financial statements require intensive investigation in this audit?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
The following additional information is obtained from independent sources and the client’s records as a means of investigating the controller’s explanations:
Jones Drugs ($ in thousands)
Industry Gross
_
|
|
Drug Sales |
Non-drug sale |
Drug cost of sales |
Non-drug cost of sale |
Industry Gross Profit Percent for Retailers of Drugs and Related Products |
|
2011 |
5,126 |
9,085 |
3,045 |
6,178 |
32.7 |
|
2010 |
5,051 |
7,865 |
2,919 |
5,347 |
32.9 |
|
2009 |
4,821 |
6,641 |
2,791 |
4,522 |
33.0 |
|
2008 |
4,619 |
5,732 |
2,665 |
3,908 |
33.2 |
|
|
|
|
|
|
|
- Evaluate the explanation provided by Adams. Show calculations to support your conclusions.
- Which specific aspects of the client’s financial statements require intensive investigation in this audit?
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