The Melville Credit Union has operated in small- town, rural Nova Scotia for the last 27 years. In the summer of 20X4, ater decades of operation as a prosperous paper mill, the Lancaster Mersey Mill was abruptly shut down. Lancaster had been a major employer of many clients of Melville Credit Union. In fact, of the 1,000 residents of the town in which Melville operates, over 320 were employed by Lancaster. he following information relates to loans receivable of Melville as of 30 June 20X4:

You, Karilyn Zinck, are in charge of the field work for the Melville audit. Melville has been a client of your firm for many years and has always received an unmodified audit report. Your audit senior reported the following discussion that took place between her and Colin Rodenizer, the chief accountant at Melville:

Required:
You are now working to identify the accounting issues that low from the above information. You have scheduled a meeting with the audit partner tomorrow and decide, in advance of the meeting, to document the issues/ areas of concern in a memo. he memo will include the quantitative impact of issues, to the extentpossible.

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30 June 20X4 $4,306,190 427,312 $3.878,878 30 June 20X3 Loans receivable Less: allowance for doubtful accounts $3,164,000 412,375 $2.751,625 Aging As of 30 June 20X3: Over 30days 60days 120 days Over Over Current Total Loans receivable $1,020,000 $872,000 $762,000 $510,000 $3,164,000 As of 30 June 20X4: Over 30 days Over 60 days Over 120 days Current Total Loans receivable $1,105,612 $632,000 $1,432,578 $1,136,000 $4.306.190