Wares kings’ financial year-end is 31 December. Does the auditor need to obtain evidence about the performance of the inventory control system from every month in the year or from a sample of months? Explain
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Wares kings’ financial year-end is 31 December. Does the auditor need to obtain evidence about the performance of the inventory
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- DineshbhaiAn inventory system designed to ensure that anitem will be available on an ongoing basis throughout the year isknown asAnother way to look at the concept of inventory turnover is by measuring sales per square foot. Taking the average inventory at retail and dividing it by the number of square feet devoted to a particular product will give you average sales per square foot. When you multiply this figure by the inventory turnover rate, you get the annual sales per square foot.
- The beginning inventory at ABC Supplies and data on purchases and sales for a three-month period ending March 31, are as follows: (See attached dates/transactions/units/totals list attached) 1. Record the inventory, purchases, and cost of merchandise sold data in a perpetual inventory record, using the first-in, first-out method. (I have attached an example of how the table should look as I had a hard time formatting the blank table I provided below) Date Purchases Cost of Merchandise sold Inventory Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Jan. 1 10 10 28 28 30 Feb. 5 10 10 16 16…The client recorded 100 Dell desktop computers in the inventory account on 30 June 2021. Each costs $2800. The auditor performed a physical count on 6 July 2021 and found 80 units in the warehouse. Which of the following follow-up procedures is not directly relevant for auditors to verify the existence of inventory at the financial year-end? Auditors enquire various warehouse staff about inventory disposals between 1 July and 6 July. The auditor takes a sample of sales invoices and matches them to shipping documents. For the missing inventory items without legitimate explanation, the auditor recommends the client adjust for the amount overstated. The auditor could obtain an inventory movement register from the client warehouse manager to see if the client sold this model between 1 July and 6 July. Auditors enquire the warehouse manager about inventory disposals between 1 July and 6 July.Scope Limitations. D. Brady has been engaged as the auditor of Patriot Company andis currently planning the year-end physical inventory counts. Patriot is a retailer that holdssignificant inventories in its warehouses and stores in six regions across the United States.Because of timing and logistics, Brady is able to observe the physical inventory at only oneof Patriot’s warehouses, which accounts for 20 percent of Patriot’s inventories.In Brady’s professional judgment, the fact that inventories held at only one warehousecan be observed does not provide sufficient evidence with respect to Patriot’s inventorybalances at the date of the financial statements. Although physical inventory counts couldbe delayed at the remaining warehouses for Brady to observe the counts, the flow of goodsin and out of the warehouses would result in a discrepancy between the inventory quantitieson hand at year-end and the inventory quantities on hand at the date of the count.Required:a. Assume that Brady…
- Journalize the following transactions that occurred in March for Downton Company. Assume Downton uses the periodic inventory system. No explanations are needed. Identify each accounts payable and accounts receivable with the vendor or customer name. Downton estimates sales returns at the end of each month. (Record debits first, then credits. Exclude explanations from journal entries. Assume the company records sales at the net amount. Round all amounts to the nearest whole dollar.) More info Mar. 3 Mar. 4 Mar. 4 Mar. 6 Mar. 8 Mar. 9 Mar. 10 Mar. 12 Mar. 13 Mar. 15 Mar. 22 Mar. 23 Mar. 25 Mar. 29 Mar. 30 Purchased merchandise inventory on account from Sherry Wholesalers, $4,000. Terms 1/15, n/EOM, FOB shipping point. Paid freight bill of $90 on March 3 purchase. Purchase merchandise inventory for cash of $1,900. Returned $1,100 of inventory from March 3 purchase. Sold merchandise inventory to Hillis Company, $2,500, on account. Terms 1/15, n/35. Purchased merchandise inventory on…On August 31, 2010, Harvey Co. decided to change from the FIFO periodic inventory system to the weightedaverage periodic inventory system. Harvey is on a calendar year basis. The cumulative effect of the change is determineda. As of January 1, 2010.b. As of August 31, 2010. c. During the eight months ending August 31, 2010, by a weighted-average of the purchases.d. During 2010 by a weighted-average of the purchases.Use the following information for the next two questions: Thursday Co. is estimating the cost of its inventory at month-end. The accountant determined the following:
- Select the best answer for the following statement: A company typically takes its physical inventory [ Select] [ Select] when it has the greatest amount of inventory of its shelves when it has the least amount of inventory of its shelves on the last day of the fiscal yearAudit Procedures 1. Select a sample of inventory items in the factory warehouse and trace each item to the inventory count sheets to determine whether it has been included and whether the quantity and description are correct. 2. Trace selected quantities from the inventory list to the physical inventory to make sure that it exists and the quantities are the same. 3. Compare the quantities on hand and unit prices on this year's inventory count sheets with those in the preceding year as a test for large differences. 4. Read the footnote disclosures related to the company's accounting policies for valu- ing inventory to make sure the information provided correctly reflects the method used to value inventory. 5. Test the extension of unit prices times quantity on the inventory list for a sample of inventory items, test foot the list, and compare the total to the general ledger. that 6. Send letters directly to third parties who hold the client's inventory, and request they respond directly…
