Identify the factors that Person L should consider in setting performance materiality for the asset accounts.

Question

Machinery was purchased for $78,500 on January 1, 2018. Shipping costs were $2,200 and installation expenses totaled $4,300. It is estimated that the machinery will have a $15,000 salvage value at the end of its 8-year useful life. What is the amount of accumulated depreciation on December 31, 2020, if the straight-line method of depreciation is used?

Answer 1

Question

Chapter 8, Problem 35DQP

a.

To determine

Identify the factors that Person L should consider in setting performance materiality for the asset accounts.

b.

To determine

Describe the reason for setting performance materiality of cash at the lowest amount.

c.

To determine

Describe the reason why Person L set performance materiality for inventory at a lower amount as compared to accounts receivable, PP&E, and other assets.

d.

To determine

Describe the reason why Person L set performance materiality for accounts receivable at the highest amount.

e.

To determine

Describe whether setting materiality at a lower level result in collecting more or less audit evidence.

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Machinery was purchased for $78,500 on January 1, 2018. Shipping costs were $2,200 and installation expenses totaled $4,300. It is estimated that the machinery will have a $15,000 salvage value at the end of its 8-year useful life. What is the amount of accumulated depreciation on December 31, 2020, if the straight-line method of depreciation is used?

Please provide the answer to this financial accounting question using the right approach.

What is the return on assets ?

Answer 2

Question

Chapter 8, Problem 35DQP

a.

To determine

Identify the factors that Person L should consider in setting performance materiality for the asset accounts.

b.

To determine

Describe the reason for setting performance materiality of cash at the lowest amount.

c.

To determine

Describe the reason why Person L set performance materiality for inventory at a lower amount as compared to accounts receivable, PP&E, and other assets.

d.

To determine

Describe the reason why Person L set performance materiality for accounts receivable at the highest amount.

e.

To determine

Describe whether setting materiality at a lower level result in collecting more or less audit evidence.

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Answer 3

Question

Chapter 8, Problem 35DQP

a.

To determine

Identify the factors that Person L should consider in setting performance materiality for the asset accounts.

b.

To determine

Describe the reason for setting performance materiality of cash at the lowest amount.

c.

To determine

Describe the reason why Person L set performance materiality for inventory at a lower amount as compared to accounts receivable, PP&E, and other assets.

d.

To determine

Describe the reason why Person L set performance materiality for accounts receivable at the highest amount.

e.

To determine

Describe whether setting materiality at a lower level result in collecting more or less audit evidence.

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Answer 4

Question

Chapter 8, Problem 35DQP

a.

To determine

Identify the factors that Person L should consider in setting performance materiality for the asset accounts.

b.

To determine

Describe the reason for setting performance materiality of cash at the lowest amount.

c.

To determine

Describe the reason why Person L set performance materiality for inventory at a lower amount as compared to accounts receivable, PP&E, and other assets.

d.

To determine

Describe the reason why Person L set performance materiality for accounts receivable at the highest amount.

e.

To determine

Describe whether setting materiality at a lower level result in collecting more or less audit evidence.

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Answer 5

Chapter 8, Problem 35DQP

a.

To determine

Identify the factors that Person L should consider in setting performance materiality for the asset accounts.

b.

To determine

Describe the reason for setting performance materiality of cash at the lowest amount.

c.

To determine

Describe the reason why Person L set performance materiality for inventory at a lower amount as compared to accounts receivable, PP&E, and other assets.

d.

To determine

Describe the reason why Person L set performance materiality for accounts receivable at the highest amount.

e.

To determine

Describe whether setting materiality at a lower level result in collecting more or less audit evidence.

Answer 6

Chapter 8, Problem 35DQP

a.

To determine

Identify the factors that Person L should consider in setting performance materiality for the asset accounts.

Answer 7

Chapter 8, Problem 35DQP

a.

To determine

Identify the factors that Person L should consider in setting performance materiality for the asset accounts.

Answer 8

b.

To determine

Describe the reason for setting performance materiality of cash at the lowest amount.

Answer 9

b.

To determine

Describe the reason for setting performance materiality of cash at the lowest amount.

Answer 10

c.

To determine

Describe the reason why Person L set performance materiality for inventory at a lower amount as compared to accounts receivable, PP&E, and other assets.

Answer 11

c.

To determine

Describe the reason why Person L set performance materiality for inventory at a lower amount as compared to accounts receivable, PP&E, and other assets.

Answer 12

d.

To determine

Describe the reason why Person L set performance materiality for accounts receivable at the highest amount.

Answer 13

d.

To determine

Describe the reason why Person L set performance materiality for accounts receivable at the highest amount.

Answer 14

e.

To determine

Describe whether setting materiality at a lower level result in collecting more or less audit evidence.

Answer 15

e.

To determine

Describe whether setting materiality at a lower level result in collecting more or less audit evidence.

Answer 16

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Answer 27

Ch. 8 - Prob. 1RQ Ch. 8 - Prob. 2RQ Ch. 8 - Prob. 3RQ Ch. 8 - Prob. 4RQ Ch. 8 - Prob. 5RQ Ch. 8 - Prob. 7RQ Ch. 8 - Prob. 8RQ Ch. 8 - Prob. 9RQ Ch. 8 - Prob. 10RQ Ch. 8 - Prob. 11RQ

Identify the factors that Person L should consider in setting performance materiality for the asset accounts.

Concept explainers

Identify the factors that Person L should consider in setting performance materiality for the asset accounts.

Describe the reason for setting performance materiality of cash at the lowest amount.

Describe the reason why Person L set performance materiality for inventory at a lower amount as compared to accounts receivable, PP&E, and other assets.

Describe the reason why Person L set performance materiality for accounts receivable at the highest amount.

Describe whether setting materiality at a lower level result in collecting more or less audit evidence.

Chapter 8 Solutions