Reference no: EM13728347
Audits of financial statements are designed to determine whether account balances are materially correct. Assume that your client is a manufacturing company that has the following assets on its balance sheet
Machinery: $1,278,000
Accumulated depreciation: $386,000
Leased equipment: $550,000
Describe a substantive audit procedure that can be used to determine that all leased equipment that should have been capitalized during the year was actually capitalized. Please refer to the knowledge from intermediate accounting and the requirements of an audit working paper to design a template audit working paper that can be used to examine whether a leased equipment should have been capitalized or treated as lease expense
The machinery account shows that the company retire approximately $400,000 of old machinery this year. Identify a substantive audit procedure that will determine the machinery account was properly accounted for during the year
Assuming the auditor determines that the machinery were properly retired, what other information does the auditor need to know to have reasonable assurance that the machinery-net of depreciation-is properly reflected on the balance sheet?
How can an auditor determine that all the machinery and leased equipment on the account actually exist?
|
Which firm will experience the highest return on equity
: Firms R and S are similar firms in the same industry. Firms R and S have the same profit margin and total asset turnover when compared. However, Firm R's capital structure is 60% debt, 40% equity, and Firm S's capital structure is 30% debt, 70% equit..
|
|
What is the net income for the firm
: Travis, Inc., has sales of $387,000, costs of $175,000, depreciation expense of $40,000, interest expense of $21,000, and a tax rate of 35 percent. What is the net income for the firm? Suppose the company paid out $30,000 in cash dividends. What is t..
|
|
What factors led to the emergence of the roman imperial
: What factors led to the collapse of the Roman Republic and the emergence of the Roman Imperial government structure?
|
|
What is the yield to maturity for the bond
: A bond has a par value of $1,000, pays $50 semi-annually and has a maturity of 10 years. If the bond earns 12% per year, what is the price of the bond? What is the yield to maturity for the bond? What would be the bond's price if the rate earned decl..
|
|
Determine whether account balances are materially correct
: Audits of financial statements are designed to determine whether account balances are materially correct. Assume that your client is a manufacturing company that has the following assets on its balance sheet. Describe a substantive audit procedure th..
|
|
Why is ford trying to increase sustainability of its cars
: Why is Ford trying to increase the sustainability of its cars, Why is Ford looking toward aluminum as an alternative material for its vehicles
|
|
Compelling mythological image
: Who was Prometheus and why is he a standard for the romantic hero? Why is Prometheus such a compelling mythological image?
|
|
Describe specifically how each similarity applies africans
: Be sure to distinguish each similarity from the other two and to describe specifically how each similarity applies both to views that Europeans had of Africans and to views that Europeans had of Native Americans.explain how it influenced actions t..
|
|
What is the percent return on equity
: In the year 2007, the average firm in the S&P 500 Index had a total market value of fives times stockholders’ equity (book value). Assume a firm had total assets of $10 million, total debt of $6 million, and net income of $600,000. What is the percen..
|