FINANCIAL ACCOUNTING 9TH
16th Edition
ISBN: 9781308821672
Author: Libby
Publisher: MCG/CREATE
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Question
Chapter 1, Problem 1.2CP
1.
To determine
Identify the net income reported by U Outfitters for the most recent year.
2.
To determine
Identify the revenue earned by U Outfitters in the most recent year.
3.
To determine
Identify the inventories available with U Outfitters, as of January 31, 2015.
4.
To determine
Identify the increase or decrease in cash and cash equivalents of U Outfitters, during the most recent year.
5.
To determine
Identify the auditor of U Outfitters.
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You are the auditor for Sigma Pty Ltd.As part of your preliminary work, you have obtained the following information:
Current Year (unaudited)
Previous Year(audited)
Industry average
i) Current ratio (Working capital ratio)
1.91
2.35
2.91
ii) Receivables turnover
57 days
51 days
73 days
iii) Inventory turnover
72 days
65 days
96 days
iv) Gross profit margin
20%
18%
20%
v) Net profit margin
4%
4%
6%
In addition you have found that:
The financial controller resigned during the year and the company has yet to hire another financial controller. The accounts of the current year were prepared by the assistant accountant.
For situation mentioned above:
i). Which component of the Audit Risk Model (ARM) would be affected, and how?
ii). Discuss how your audit plan would be affected.
Note:Prepare your answers in a tabular format as follows:
Component of ARM
Effect on Audit Plan
Required information
Use the following information for the Problems below. (Algo)
[The following information applies to the questions displayed below.]
Lansing Company's current-year income statement and selected balance sheet data at December 31 of the current and
prior years follow.
LANSING COMPANY
Income Statement
For Current Year Ended December 31
Sales revenue
Expenses
Cost of goods sold
Depreciation expense
Salaries expense
Rent expense
Insurance expense
Interest expense
Utilities expense
Net income
$ 124,200
At December 31
Accounts receivable
Inventory
Accounts payable
Salaries payable
Utilities payable
Prepaid insurance
Prepaid rent
51,000
16,500
27,000
9,900
4,700
4,500
3,700
$ 6,900
LANSING COMPANY
Selected Balance Sheet Accounts
Current Year
$ 6,500
2,880
5,300
1,060
400
350
400
Prior Year
$ 7,600
1,990
6,400
790
250
460
270
Chapter 1 Solutions
FINANCIAL ACCOUNTING 9TH
Ch. 1 - Define accounting.Ch. 1 - Briefly distinguish financial accounting from...Ch. 1 - Prob. 3QCh. 1 - Prob. 4QCh. 1 - Prob. 5QCh. 1 - Complete the following: Name of Statement...Ch. 1 - What information should be included in the heading...Ch. 1 - What are the purposes of (a) the income statement,...Ch. 1 - Explain why the income statement and the statement...Ch. 1 - Prob. 10Q
Ch. 1 - Prob. 11QCh. 1 - Explain the equation for the income statement....Ch. 1 - Explain the equation for the balance sheet. Define...Ch. 1 - Explain the equation for the statement of cash...Ch. 1 - Explain the equation for retained earnings....Ch. 1 - The financial statements discussed in this chapter...Ch. 1 - Prob. 17QCh. 1 - Prob. 18QCh. 1 - (Supplement A) Briefly differentiate between a...Ch. 1 - Prob. 20QCh. 1 - Which of the following is not one of the four...Ch. 1 - Prob. 2MCQCh. 1 - Prob. 3MCQCh. 1 - Which of the following regarding retained earnings...Ch. 1 - Which of the following is not one of the four...Ch. 1 - Prob. 6MCQCh. 1 - Prob. 7MCQCh. 1 - Which of the following is true regarding the...Ch. 1 - Prob. 9MCQCh. 1 - Prob. 10MCQCh. 1 - Matching Elements with Financial Statements M1-1...Ch. 1 - Matching Financial Statement Items to Financial...Ch. 1 - Prob. 1.3MECh. 1 - Prob. 1.1ECh. 1 - Matching Financial Statement Items to Financial...Ch. 1 - Matching Financial Statement Items to Financial...Ch. 1 - Preparing a Balance Sheet Honda Motor Corporation...Ch. 1 - Completing a Balance Sheet and Inferring Net...Ch. 1 - Prob. 1.6ECh. 1 - Preparing an Income Statement and Inferring...Ch. 1 - Prob. 1.8ECh. 1 - Inferring Values Using the Income Statement and...Ch. 1 - Inferring Values Using the Income Statement and...Ch. 1 - Preparing an Income Statement and Balance Sheet...Ch. 1 - Preparing an Income Statement and Balance Sheet...Ch. 1 - Preparing a Statement of Stockholders Equity...Ch. 1 - Focus on Cash Flows: Matching Cash Flow Statement...Ch. 1 - Preparing an Income Statement, Statement of...Ch. 1 - Analyzing a Student's Business and Preparing an...Ch. 1 - Comparing Income with Cash Flow (Challenging)...Ch. 1 - Evaluating Data to Support a Loan Application...Ch. 1 - Preparing an Income Statement, Statement of...Ch. 1 - Analyzing a Students Business and Preparing an...Ch. 1 - Prob. 1.3APCh. 1 - Prob. 1.1CONCh. 1 - Finding Financial Information LO1-1 Refer to the...Ch. 1 - Prob. 1.2CPCh. 1 - Comparing Companies within an Industry Refer to...Ch. 1 - Using Financial Reports: Identifying and...Ch. 1 - Prob. 1.5CPCh. 1 - Prob. 1.6CPCh. 1 - Prob. 1.7CP
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