State the extent to which the auditors should follow the client’s suggestion for the conduct of an audit.

Question

Brock's Pest Control, Inc. has sales of $945,000, costs of $410,000, depreciation expense of $67,000, interest expense of $45,000, and a tax rate of 23%. The firm just paid out $120,000 in cash dividends and has 100,000 shares of common stock outstanding. a. What is the Earnings Per Share (EPS)? b. What is the Dividends Per Share (DPS)?

Answer 1

Question

Chapter 2, Problem 54EP

a.

To determine

State the extent to which the auditors should follow the client’s suggestion for the conduct of an audit.

b.

To determine

State the reasons that the audit should not be based solely on assets, liability, and income and expenses categories.

c.

To determine

State that the staff member of an accounting firm should be assigned to examine advertising costs of an advertising agency which is owned by the member’s uncle.

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Brock's Pest Control, Inc. has sales of $945,000, costs of $410,000, depreciation expense of $67,000, interest expense of $45,000, and a tax rate of 23%. The firm just paid out $120,000 in cash dividends and has 100,000 shares of common stock outstanding. a. What is the Earnings Per Share (EPS)? b. What is the Dividends Per Share (DPS)?

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Answer 2

Question

Chapter 2, Problem 54EP

a.

To determine

State the extent to which the auditors should follow the client’s suggestion for the conduct of an audit.

b.

To determine

State the reasons that the audit should not be based solely on assets, liability, and income and expenses categories.

c.

To determine

State that the staff member of an accounting firm should be assigned to examine advertising costs of an advertising agency which is owned by the member’s uncle.

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Answer 3

Question

Chapter 2, Problem 54EP

a.

To determine

State the extent to which the auditors should follow the client’s suggestion for the conduct of an audit.

b.

To determine

State the reasons that the audit should not be based solely on assets, liability, and income and expenses categories.

c.

To determine

State that the staff member of an accounting firm should be assigned to examine advertising costs of an advertising agency which is owned by the member’s uncle.

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Answer 4

Question

Chapter 2, Problem 54EP

a.

To determine

State the extent to which the auditors should follow the client’s suggestion for the conduct of an audit.

b.

To determine

State the reasons that the audit should not be based solely on assets, liability, and income and expenses categories.

c.

To determine

State that the staff member of an accounting firm should be assigned to examine advertising costs of an advertising agency which is owned by the member’s uncle.

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Answer 5

Chapter 2, Problem 54EP

a.

To determine

State the extent to which the auditors should follow the client’s suggestion for the conduct of an audit.

b.

To determine

State the reasons that the audit should not be based solely on assets, liability, and income and expenses categories.

c.

To determine

State that the staff member of an accounting firm should be assigned to examine advertising costs of an advertising agency which is owned by the member’s uncle.

Answer 6

Chapter 2, Problem 54EP

a.

To determine

State the extent to which the auditors should follow the client’s suggestion for the conduct of an audit.

Answer 7

Chapter 2, Problem 54EP

a.

To determine

State the extent to which the auditors should follow the client’s suggestion for the conduct of an audit.

Answer 8

b.

To determine

State the reasons that the audit should not be based solely on assets, liability, and income and expenses categories.

Answer 9

b.

To determine

State the reasons that the audit should not be based solely on assets, liability, and income and expenses categories.

Answer 10

c.

To determine

State that the staff member of an accounting firm should be assigned to examine advertising costs of an advertising agency which is owned by the member’s uncle.

Answer 11

c.

To determine

State that the staff member of an accounting firm should be assigned to examine advertising costs of an advertising agency which is owned by the member’s uncle.

Answer 12

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Ch. 2 - Prob. 1RC Ch. 2 - Prob. 2RC Ch. 2 - Prob. 3RC Ch. 2 - Prob. 4RC Ch. 2 - Prob. 5RC Ch. 2 - Prob. 6RC Ch. 2 - Prob. 7RC Ch. 2 - Prob. 8RC Ch. 2 - Prob. 9RC Ch. 2 - Prob. 10RC

State the extent to which the auditors should follow the client’s suggestion for the conduct of an audit.

State the extent to which the auditors should follow the client’s suggestion for the conduct of an audit.

State the reasons that the audit should not be based solely on assets, liability, and income and expenses categories.

State that the staff member of an accounting firm should be assigned to examine advertising costs of an advertising agency which is owned by the member’s uncle.

Chapter 2 Solutions