1. Assume a 30% tax rate, and the Totals per financial statements provided. Complete the following schedule as per Figure 16.4. Assume that the Totals per financial statements (second to bottom row) have appropriately been entered on this schedule from the financial statements.

2. Assume that the client does not intend to record any of the above misstatements and that 6 percent of income after taxes is considered a material misstatement. Provide the auditor’s conclusion in this situation. Only consider the income effect.

3. Assume that the client does intends to record correcting entries for each above misstatement. Provide the auditor’s conclusion in this situation.

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Beta Computer Equipment Company Total Likely Misstatement December 31, 20x3 Debit (Credit) Assets Liabilities Income Statement Cost of Selling, Gen. Sales Admin.,Other Non- Non- Number Туре Current current Current current Revenue Income 1 2 3 4 6 Total Uncorrected Tax effect at 30% on current liab. After Tax Effect on Income Totals per financial statements 9,206,553.00 1,237,543.00 6,239,932.00 2,400,000.00 82,000,000.00 71,000,406.00 8,002,378.00 ! 1,323,839.00 Percent of unrrecorded to f.s. Beta Computer Equipment Company Total Likely Misstatement December 31, 20x3 Debit (Credit) Assets Liabilities Income Statement Cost of Selling, Gen. Sales Admin.,Other Non- Non- Number Туре Current current Current current Revenue Income 1 2 3 4 6 Total Uncorrected Tax effect at 30% on current liab. After Tax Effect on Income Totals per financial statements 9,206,553.00 1,237,543.00 6,239,932.00 2,400,000.00 82,000,000.00 71,000,406.00 8,002,378.00 ! 1,323,839.00 Percent of unrrecorded to f.s.

Answer rating: 100% (QA)

1 Tax rate as per financial statements Income 10070 132383910070 Rs 189770 2 I... View the full answer