Description of this paper

ACC - KEYSTONE CASE, CHAPTER 16

Description

solution


Question

Question;KEYSTONE CASE, CHAPTER 16 (page 657);IN-CLASSTEAMCASE;16?48 The;audit staff of Adams, Barnes & Co. (ABC), CPAs, reported the following;audit findings in their audit of Keystone Computers & Networks (KCN), Inc.;1. Unrecorded liabilities in the amount;of $6,440 for purchases of inventory. These inventory items were counted and;included in the year?end total.;2. Projected misstatement from;confirmation of accounts receivable in the amount of $2,042 understatement.;3. Projected;misstatement from price tests of inventory of $9,510 overstatement.;4. The staff of ABC believes that the;amount of KCN's allowance for uncollectible accounts should be increased by;$5,000.;In addition, the audit staff has decided that for evaluating;a material misstatement of the financial statements the following guidelines;should be used;Current assets?$50,000;Noncurrent assets?$75,000;Current liabilities?$50,000;Noncurrent liabilities?$75,000;Total owners' equity?$100,000;Net income before taxes?$65,000;Required;a. Prepare a schedule modeled after the;one on page 656 to be used to evaluate the above audit findings, assuming that;KCN's marginal tax rate is 25 percent.;b. Decide;whether the results indicate that there is a sufficiently low risk of material;misstatement to justify ABC's audit opinion

 

Paper#41988 | Written in 18-Jul-2015

Price : $21
SiteLock