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You are the audit team assign to audit the unaudited set of financial statements for XYZ Company Ltd. for year ended 30 June 2002. Prepare written report to highlight the audit procedures to be used to substantiate/confirm the amounts reported for following items on the financial statements provided:   Purchases and accounts payable

You are the audit team assign to audit the unaudited set of financial statements for XYZ Company Ltd. for year ended 30 June 2002. Prepare written report to highlight the audit procedures to be used to substantiate/confirm the amounts reported for following items on the financial statements provided:   Purchases and accounts payable

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter15: Statement Of Cash Flows
Section: Chapter Questions
Problem 14E
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You are the audit team assign to audit the unaudited set of financial statements for XYZ Company Ltd. for year ended 30 June 2002.

  1. Prepare written report to highlight the audit procedures to be used to substantiate/confirm the amounts reported for following items on the financial statements provided:   Purchases and accounts payable
REVENUE COST OF SALES Opening inventory Delivery Purchases Closing inventory GROSS PROFIT XYZ COMPANY LIMITED STATEMENT OF INCOME AND RETAINED EARNINGS FOR THE YEAR ENDED JUNE 30, 2002 OPERATING EXPENSES (schedule) INCOME FROM OPERATIONS UNAUDITED - See "Notice to Reader" OTHER INCOME (EXPENSES) Loss on disposal of property, plant and equipment Gain on sale of investment Miscellaneous NET INCOME BEFORE TAX INCOME TAX EXPENSE NET INCOME DIVIDENDS (DEFICIT)- Beginning of Year RETAINED EARNINGS (DEFICIT) - End of Year 2002 $ 1,104,786 $ 156,657 1,607 740,994 899,258 159,144 740,114 364,672 286,817 77,855 16,149 (1,101) 15,048 92,903 14,387 78,516 (61,350) 17,166 $ 1,133,736 $ 2001 The accompanying summary of significant accounting policies and notes are an integral part of these financial statements. 146,278 1,249 794,101 941,628 156,657 784,971 348,765 339,905 8,860 (387) 337 (50) 8,810 8,810 (54,160) (16,000) (61,350)
Transcribed Image Text:REVENUE COST OF SALES Opening inventory Delivery Purchases Closing inventory GROSS PROFIT XYZ COMPANY LIMITED STATEMENT OF INCOME AND RETAINED EARNINGS FOR THE YEAR ENDED JUNE 30, 2002 OPERATING EXPENSES (schedule) INCOME FROM OPERATIONS UNAUDITED - See "Notice to Reader" OTHER INCOME (EXPENSES) Loss on disposal of property, plant and equipment Gain on sale of investment Miscellaneous NET INCOME BEFORE TAX INCOME TAX EXPENSE NET INCOME DIVIDENDS (DEFICIT)- Beginning of Year RETAINED EARNINGS (DEFICIT) - End of Year 2002 $ 1,104,786 $ 156,657 1,607 740,994 899,258 159,144 740,114 364,672 286,817 77,855 16,149 (1,101) 15,048 92,903 14,387 78,516 (61,350) 17,166 $ 1,133,736 $ 2001 The accompanying summary of significant accounting policies and notes are an integral part of these financial statements. 146,278 1,249 794,101 941,628 156,657 784,971 348,765 339,905 8,860 (387) 337 (50) 8,810 8,810 (54,160) (16,000) (61,350)
CURRENT Cash ASSETS INVESTMENTS Accounts receivable Deposits and prepaid expenses Inventory CURRENT PROPERTY, PLANT AND EQUIPMENT (Note 2) LIABILITIES Bank overdraft Bank loan XYZ COMPANY LIMITED BALANCE SHEET UNAUDITED - See "Notice to Reader" Accounts payable and accrued liabilities Long-term debt current portion Income tax payable DUE TO SHAREHOLDER (Note 3) LONG-TERM DEBT (Note 4) AS AT JUNE 30, 2002 SHAREHOLDER'S EQUITY STATED CAPITAL (Note 5) RETAINED EARNINGS (DEFICIT) APPROVED $ $ 2002 11,552 42,970 2,942 159,144 216,608 59,890 276,498 82,053 25,200 14,387 121,640 51,591 86,100 259,331 1 17,166 17,167 276,498 $ 2001 The accompanying summary of significant accounting policies and notes are an integral part these financial statements. 50,595 2,688 156,657 209,940 76,318 45,001 331,259 9,474 60,000 91,343 160,817 231,791 392,608 (61,350) (61,349) $ 331,259
Transcribed Image Text:CURRENT Cash ASSETS INVESTMENTS Accounts receivable Deposits and prepaid expenses Inventory CURRENT PROPERTY, PLANT AND EQUIPMENT (Note 2) LIABILITIES Bank overdraft Bank loan XYZ COMPANY LIMITED BALANCE SHEET UNAUDITED - See "Notice to Reader" Accounts payable and accrued liabilities Long-term debt current portion Income tax payable DUE TO SHAREHOLDER (Note 3) LONG-TERM DEBT (Note 4) AS AT JUNE 30, 2002 SHAREHOLDER'S EQUITY STATED CAPITAL (Note 5) RETAINED EARNINGS (DEFICIT) APPROVED $ $ 2002 11,552 42,970 2,942 159,144 216,608 59,890 276,498 82,053 25,200 14,387 121,640 51,591 86,100 259,331 1 17,166 17,167 276,498 $ 2001 The accompanying summary of significant accounting policies and notes are an integral part these financial statements. 50,595 2,688 156,657 209,940 76,318 45,001 331,259 9,474 60,000 91,343 160,817 231,791 392,608 (61,350) (61,349) $ 331,259
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