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he BakFirn Corporation end-of-year is 12/31/20XX.Sales for the previous year were $10,000,000. Sales this year are coming in at $9,500,000.The...

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he BakFirn Corporation end-of-year is 12/31/20XX.;Sales for the previous year were $10,000,000. Sales this year are coming in at $9,500,000.;The firm is in the construction machine industry, making specialty tools.;Account receivable days sales outstanding (DSO) has been averaging 90?120 days. The year before, it was 80?90 days.;Inventory turns have decreased from 3 to 2 per year.;Account receivable and inventory make up 80% of total assets.;Internal auditing has been reduced by one person to reduce costs.;An initial test of controls in cash receipt indicated a lack of following procedures.;The construction industry is in the third year of a downturn. It is forecasted to last two more years.;The audit team has defined materiality to be focused on account receivable and inventory with $3,000 being the initial threshold. Net income for last year was $1,000,000.;Inventory at the end of the year was $2,500,000.;Account receivable at the end of the year was $2,740,000, or 100 DSO.

 

Paper#76485 | Written in 18-Jul-2015

Price : $22
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