ANALYSIS OF SUPERIOR COMPANY PROPERTY, PLANT, AND EQUIPMENT AS OF DECEMBER 31, 2008 Property, Plant, and Equipment
Question:
ANALYSIS OF SUPERIOR COMPANY PROPERTY, PLANT, AND EQUIPMENT AS OF DECEMBER 31, 2008 | |||||||||||
Property, Plant, and Equipment | Accumulated Depreciation | ||||||||||
Balance | Balance | Balance | Balance | ||||||||
Account | 12/31/07 | Additions | Disposals | Other | 12/31/08 | Life | Method | 12/31/07 | Provision | Disposal | 12/31/08 |
Land | 650,000 Τ | 650,000 T2 | |||||||||
Building | 3,270,000 Τ | 230,000Δ | (30,000)◄ | 3,470,000 T2 | 20 years | S/L | 1,144,500 T | 168,500 R | 1,313,000 T2 | ||
Equipment | 1,750,000 Τ | 90,000 ± | (12,000) X | 30,000 ◄ | 1,858,000 T2 | 10 years | S/L | 700,000 T | 179,500 R | (12,000) | 867,500 T2 |
5,670,000 | 320,000 | (12,000) | 0 | 5,978,000 | 1,844,500 | 368,000 | (12,000) | 2,189,500 | |||
What audit test would each of the following symbols (tickmarks) represent? | |||||||||||
AUDIT TESTS | |||||||||||
Δ = | 1. Does not recompute correctly. | ||||||||||
2. Tested reasonableness of calculation | |||||||||||
3. Traced amount to current year's trial balance and general ledger. | |||||||||||
◄ = | 4. Reclassification entry for equipment erroneously recorded as building. | ||||||||||
5. Reclassification entry for building erroneously recorded as equipment. | |||||||||||
6. Traced amount to prior year's working papers. | |||||||||||
± = | 7. Sold equipment to employees. Traced cash receipt into cash receipt journal. | ||||||||||
8. Confirmed with an exception. | |||||||||||
9. Confirmed without exception. | |||||||||||
Τ = | 10. Examined supporting vendors' invoices, canceled checks, asset subsidiary ledger, | ||||||||||
and board of directors' minutes of meetings authorizing transactions. | |||||||||||
11. Examined supporting work orders and engineers' reports, canceled checks, asset | |||||||||||
X = | subsidiary ledger, and board of directors' minutes of meetings authorizing transactions. | ||||||||||
12. Examined supporting deed and purchase contract, canceled checks, asset subsidiary | |||||||||||
ledger, and board of directors' minutes of meetings authorizing transactions. | |||||||||||
T2 = | |||||||||||
R = | |||||||||||
EXTRA QUESTION: | |||||||||||
There is a big problem with this wallpaper that many auditors | |||||||||||
would overlook. What is it? | |||||||||||
Intermediate Accounting
ISBN: 978-0324300987
10th Edition
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones