1). Using the Schedule of Equipment and Leasehold Improvements and the Depreciation Schedule, analyze the reasonableness of the depreciation expense for each fixed-asset category on a yearly basis and explain your findings. Assume fixed assets have a 5-year life and a mid-year purchase date.

2). Based on your conclusions in question 3 regarding equipment, which fraud scheme(s) might cause this activity and what additional procedures might you perform?

3). Based on your conclusions in question 3 regarding leasehold improvements, which fraud scheme(s) might cause this activity and what additional procedures might you perform?

Transcribed Image Text:

Schedule of Equipment and Leasehold Improvements Equipment 626,510 Leasehold Improvements 143,421 769,931 Equipment Leasehold Improvements Beginning Balance Equipment Leasehold Improvements Beginning Balance 741,340 158,986 900,326 Beginning Balance 1,097,528 205,871 1,303,399 Additions 131,440 15,565 147,005 Additions 20X1 Additions 20X2 307,790 46,885 354,675 20X3 6,953,306 135,642 7,088,948 Retirements 16,610 16,610 Retirements 40,602 40,602 Retirements 125,864 125,864 Ending Balance 741,340 158,986 900,326 Ending Balance 1,097,528 205,871 1,303,399 Ending Balance 7,924,970 341,513 8,266,483 0 1 2 2 B 9 Equipment O Leasehold Improvements 2 3 7 Equipment Leasehold Improvements 3 Equipment Leasehold Improvements Depreciation Schedule Beginning Balance 185,696 24,668 210,364 Beginning Balance 255,521 44,436 299,957 Beginning Balance 326,138 67,580 393,718 Additions 84,325 19,768 104,093 Additions 105,718 23,144 128,862 Additions 1,024,587 17,828 1,042,415 20X1 Retirements 20X2 14,500 20X3 14,500 Retirements 35,101 35,101 Retirements 109,875 109,875 Ending Balance 255,521 44,436 299,957 Ending Balance 326,138 67,580 393,718 Ending Balance 1,240,850 85,408 1,326,258 Schedule of Equipment and Leasehold Improvements Equipment 626,510 Leasehold Improvements 143,421 769,931 Equipment Leasehold Improvements Beginning Balance Equipment Leasehold Improvements Beginning Balance 741,340 158,986 900,326 Beginning Balance 1,097,528 205,871 1,303,399 Additions 131,440 15,565 147,005 Additions 20X1 Additions 20X2 307,790 46,885 354,675 20X3 6,953,306 135,642 7,088,948 Retirements 16,610 16,610 Retirements 40,602 40,602 Retirements 125,864 125,864 Ending Balance 741,340 158,986 900,326 Ending Balance 1,097,528 205,871 1,303,399 Ending Balance 7,924,970 341,513 8,266,483 0 1 2 2 B 9 Equipment O Leasehold Improvements 2 3 7 Equipment Leasehold Improvements 3 Equipment Leasehold Improvements Depreciation Schedule Beginning Balance 185,696 24,668 210,364 Beginning Balance 255,521 44,436 299,957 Beginning Balance 326,138 67,580 393,718 Additions 84,325 19,768 104,093 Additions 105,718 23,144 128,862 Additions 1,024,587 17,828 1,042,415 20X1 Retirements 20X2 14,500 20X3 14,500 Retirements 35,101 35,101 Retirements 109,875 109,875 Ending Balance 255,521 44,436 299,957 Ending Balance 326,138 67,580 393,718 Ending Balance 1,240,850 85,408 1,326,258

Answer rating: 100% (QA)

Answer 1 The below is the analysis for the depreciation Equipment Gross Block Year Opening Gross Value Additions Deletions Closing Gross Value 2001 62... View the full answer