. 182 x A G H J K fx B D F-Footed without exception M. Amount is considered immaterial (82,527,454), no further work necessary TB - Agrees to Trial Balance without exception PY - Agrees to prior year audited trial balance without exception Instructions: For this assignment you'll chose three different relationships (A, B, and C) from the trial balance (a relationship-2 or more accounts) and bypothesize at least two reasons we see the change we do, as well as if you think RMM should increase, decrease or remain neutral. Use your GAAP knowledge and your business semen to appropriately address what may or may not be expected. You are free to use any information available to you either via the memos or the competitor financial statements. Don't know where to begin Hine: It is useful to first figure out what the company does.. 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 100 1040 105 106 107 108 100 110 111 112 113 114 115 116 117 110 119 120 121 122 123 124 Example) The auditor notes a significant increase in AR (214%) while Sales remain relatively constant (1%). One reason we see this unexpected change in AR without a supporting change in sales is that the credit policy changed and credit sales were extended to lower quality customers who have been less likely to remit payment. Further investigation will be performed. Another reason we may see the change is that some uncollectible accounts in AR were not removed, we note a supporting decrease in Bad Debt Expense which has no balance for the current year. This raises the risk of material misstatement associated with AR and the ADA and BDE A) B) ) C) 125 Here CEE (Raw Chance PO 1.15 09 2016 21496 E 100004 - E 2607% -7296 3615 - 100% 19 09 09 576% 27296 247 0 -50 DIVO -100% 54 1855% 1857% 6 7 Account ID Account Description B 10100 Cith an Hand 9 10200 Regular Checking Account 10 10300 Payroll Checking Account 11 10400 Savings Account 12 11000 Accounts Receivable 13 11400 Other Receivables 11500 Allowance for Dochtful Account 15 12000 Inventory 16 12300 Reserve for Inventory Obsolescence 17 14100 Prepaid Insurapce 18 14200 Prepaid Rent 19 14300 Office Supplies 20 14400 Notes Receivable-Current 21 14700 Other Current Assets 22 15000 Land 23 15100 Buildines and Land Improvements 24 15200 Machinery, Equipment, orice Furniture 25 17000 Accum. Depreciation 26 19000 Investments 27 19900 Other Noncurrent Aucts 28 20000 Accounts Payable 29 23100 Sales Tax Payable 30 21200 Wares Payabic 31 23300 FICA Employee Wahholding 32 23350 Medicare Withholding 33 23.400 Federal Payroll Taxes Payable 34 21500 PUTA Tax Payable 35 23600 Se Payroll Taxes Payable 36 23700 SUTA Tax Payable 37 23800 FICA Emplover Withholding 38 23900 Medicare Employee Withholding 39 24100 Line of Great 40 24200 Current Portion Long Term Debt 41 24700 Other Current Liabilities 42 27000 Notes Payable-Noncurre 13 39003 Common Sheck 44 39004 Paid-in Capital 45 39005 Retained Earnings 46 40000 Sales 47 41000 Sales Returns 48 42000 Warranty Expense 49 45000 Income from lovetoets 50 46000 rencome 51 47000 Miscellaneous Ice 52 50010 Cost of Goods So 57500 Fret 56 60000 Advertising pense 55 51000 Auto Eupes 56 62000 Research and Development 57 64000 Depreciation Expen 58 64500 Warehouse Salaries 59 65000 Property Tax Expense 00 66000 Legal and Professional Expen 61 67000 Bad Debt Expo 62 68000 Insurance Expen 63 70000 Maintenance Expense 64 70100 Unit 05 70110 Phone 00 70120 Postal 67 71000 Miscellaneous Orice Free 08 72000 Payroll Tax Exp 73000 ProProf Sharing Plan Ex 70 THGOD Controllers Clearning Account 74000 Rent or Lean Es 2019 White (Andred (Used) (CY-PY $1,98728 PY $2,275.23 TB 28795 S19811652 PY 5557.125.92 TB 159,009 40 50.00 PY 50.00 TB 0.00 $3,044 958.13 PY $3,645,599.15 TB 600, 641 02 $16.410,90271 PY 533.515.259 98 TB 35,104 357.27 $0.00 PY $1,250,000.00 TB 1.250.000.00 (51.262.819) PY ($1.20000975) TB 23,810,13 518 325,205 24 PY 567,724,52750 TB 4R 199.322.26 (53.012.000.00) PY 15345,000.00 MB 2.166 000 00 5743,314,38 PY 53,424,21378 TB 2610.599.40 $200,000.00 PY 50,00 TB (2000.000 $7,406 2.PY SK 54000. TB 1.133.18 $0.00 PY $0.00 TB 0.00 $0.00 PY $0.00 TS 0.00 $11700000 PY $11700000 0.00 5623,905 92 PY $674313 92 TB 50.4000 5433,217.10 PY $2,929,097,13 TB 2.495 880.03 (5164.00000) PY (5610.000.00) TB (446.000.00) 5572,691.08 PY 51.996.780 39 TB 1.426,089.31 353,840.59 PY $53.840.59. TB 0.00 (54,633,118.09) PY (51.922.095.91 TB 2,711,022.18 $0.00 PY $0.00 TB 0.00 ($29.47012) PY 50.00 TB 29470.32 (51,318.69) PY 5643965) TB 1712096) 55839) PY 1511 414.99 TB (1030) 15601301) PY ($118.086.12) TB 212.05.11) $0.00 PY $0.00. TB 0.00 (52,81547) PY (555.1058 TB (52.29139 5000 PY 50.00 TB 000 (51,31869) PY 158,43965) TB (3.120.90) (558399) PY 1511414.99 TB 10,831.00) (510.000.000,00) PY (544,403,000.00 TB (4401 000.00 50.00 PY $0.00 TB 0.00 50.00 PY SODOTB 000 $0.00 PY (S12.000.000,00) TB (12.000.000.00 (SX 105.000.00) PY (58,105 000 00) TB 0.00 (57.423,000.00) PY (57.423,000,00) TB 0.00 152.219,12065) PY (56590,483 64) TB 4,371,362.99 (5246,172,918 44) PY(5242,213.45285) TB 3.459 46556 54,497.583.20 PY 511,100,220 39 TB 6,602,637.69 51.100,281 48 PY $1158 128 47 TB 57.346.99 50.00 PY (51 476,08931) TB 426,09 31 (520430281) PY 15131146) TB 72.42135 $0.00 PY 152.16600000) TB 12.166.000.00 5141,549,221 61 PY 5130,196 64526 TB (11.372.576 35) 54,302.951 46 PY 54,240,263 09 TB 62,683 5897,140.01 PY SL036854.01 TS 119,714,00 $20397439 PY S210,502 50.TR 1:52.41 531,212,334 17 PY $528,870.44 TB 30.41.463.73) $133.000,00 PM 5446,000.00 TB 313 000 00 $4,633.383 82 PY 54.720,715 56 TB 87,33174 580,495 32 PY 599 332.45 TB 18.37.13 33 605,133.95 PY 54,913.224 45.78 13.090.49 51.622.425 99 PY $0.00 TB (1.622.425.99 5853.942.65 PY 536,105 92 TB (8171573) 561.12.04 PY $35,502 57 TB 25,6332 $135.642.99 PY 5137312 18. 1.68919 576,373.78 PY $52.599 02 TB 23.77476 512801121 PY 577.803 61 TB (50.22960 $17,023 27 PY 524.191 82 TB 7.868 55 51.550.919.06 PY $1,5778113 T 26822.79 $3.000.000.00 PY 53.630,3750 TB 630,3750 50.00 PY (5130,175 ) TB 330,375 52.603.435,87. Y $1.206,574.00 TB (0.1991 1897% 096 54096 1855% 3445 OS 100% 0 ON 1974 -IWE 1474 54 100 -35% 100% 16% 19 -98% 235% 24 23% 36% -1009 - 90% 19 46% 24 2145 100% -50% . 182 x A G H J K fx B D F-Footed without exception M. Amount is considered immaterial (82,527,454), no further work necessary TB - Agrees to Trial Balance without exception PY - Agrees to prior year audited trial balance without exception Instructions: For this assignment you'll chose three different relationships (A, B, and C) from the trial balance (a relationship-2 or more accounts) and bypothesize at least two reasons we see the change we do, as well as if you think RMM should increase, decrease or remain neutral. Use your GAAP knowledge and your business semen to appropriately address what may or may not be expected. You are free to use any information available to you either via the memos or the competitor financial statements. Don't know where to begin Hine: It is useful to first figure out what the company does.. 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 100 1040 105 106 107 108 100 110 111 112 113 114 115 116 117 110 119 120 121 122 123 124 Example) The auditor notes a significant increase in AR (214%) while Sales remain relatively constant (1%). One reason we see this unexpected change in AR without a supporting change in sales is that the credit policy changed and credit sales were extended to lower quality customers who have been less likely to remit payment. Further investigation will be performed. Another reason we may see the change is that some uncollectible accounts in AR were not removed, we note a supporting decrease in Bad Debt Expense which has no balance for the current year. This raises the risk of material misstatement associated with AR and the ADA and BDE A) B) ) C) 125 Here CEE (Raw Chance PO 1.15 09 2016 21496 E 100004 - E 2607% -7296 3615 - 100% 19 09 09 576% 27296 247 0 -50 DIVO -100% 54 1855% 1857% 6 7 Account ID Account Description B 10100 Cith an Hand 9 10200 Regular Checking Account 10 10300 Payroll Checking Account 11 10400 Savings Account 12 11000 Accounts Receivable 13 11400 Other Receivables 11500 Allowance for Dochtful Account 15 12000 Inventory 16 12300 Reserve for Inventory Obsolescence 17 14100 Prepaid Insurapce 18 14200 Prepaid Rent 19 14300 Office Supplies 20 14400 Notes Receivable-Current 21 14700 Other Current Assets 22 15000 Land 23 15100 Buildines and Land Improvements 24 15200 Machinery, Equipment, orice Furniture 25 17000 Accum. Depreciation 26 19000 Investments 27 19900 Other Noncurrent Aucts 28 20000 Accounts Payable 29 23100 Sales Tax Payable 30 21200 Wares Payabic 31 23300 FICA Employee Wahholding 32 23350 Medicare Withholding 33 23.400 Federal Payroll Taxes Payable 34 21500 PUTA Tax Payable 35 23600 Se Payroll Taxes Payable 36 23700 SUTA Tax Payable 37 23800 FICA Emplover Withholding 38 23900 Medicare Employee Withholding 39 24100 Line of Great 40 24200 Current Portion Long Term Debt 41 24700 Other Current Liabilities 42 27000 Notes Payable-Noncurre 13 39003 Common Sheck 44 39004 Paid-in Capital 45 39005 Retained Earnings 46 40000 Sales 47 41000 Sales Returns 48 42000 Warranty Expense 49 45000 Income from lovetoets 50 46000 rencome 51 47000 Miscellaneous Ice 52 50010 Cost of Goods So 57500 Fret 56 60000 Advertising pense 55 51000 Auto Eupes 56 62000 Research and Development 57 64000 Depreciation Expen 58 64500 Warehouse Salaries 59 65000 Property Tax Expense 00 66000 Legal and Professional Expen 61 67000 Bad Debt Expo 62 68000 Insurance Expen 63 70000 Maintenance Expense 64 70100 Unit 05 70110 Phone 00 70120 Postal 67 71000 Miscellaneous Orice Free 08 72000 Payroll Tax Exp 73000 ProProf Sharing Plan Ex 70 THGOD Controllers Clearning Account 74000 Rent or Lean Es 2019 White (Andred (Used) (CY-PY $1,98728 PY $2,275.23 TB 28795 S19811652 PY 5557.125.92 TB 159,009 40 50.00 PY 50.00 TB 0.00 $3,044 958.13 PY $3,645,599.15 TB 600, 641 02 $16.410,90271 PY 533.515.259 98 TB 35,104 357.27 $0.00 PY $1,250,000.00 TB 1.250.000.00 (51.262.819) PY ($1.20000975) TB 23,810,13 518 325,205 24 PY 567,724,52750 TB 4R 199.322.26 (53.012.000.00) PY 15345,000.00 MB 2.166 000 00 5743,314,38 PY 53,424,21378 TB 2610.599.40 $200,000.00 PY 50,00 TB (2000.000 $7,406 2.PY SK 54000. TB 1.133.18 $0.00 PY $0.00 TB 0.00 $0.00 PY $0.00 TS 0.00 $11700000 PY $11700000 0.00 5623,905 92 PY $674313 92 TB 50.4000 5433,217.10 PY $2,929,097,13 TB 2.495 880.03 (5164.00000) PY (5610.000.00) TB (446.000.00) 5572,691.08 PY 51.996.780 39 TB 1.426,089.31 353,840.59 PY $53.840.59. TB 0.00 (54,633,118.09) PY (51.922.095.91 TB 2,711,022.18 $0.00 PY $0.00 TB 0.00 ($29.47012) PY 50.00 TB 29470.32 (51,318.69) PY 5643965) TB 1712096) 55839) PY 1511 414.99 TB (1030) 15601301) PY ($118.086.12) TB 212.05.11) $0.00 PY $0.00. TB 0.00 (52,81547) PY (555.1058 TB (52.29139 5000 PY 50.00 TB 000 (51,31869) PY 158,43965) TB (3.120.90) (558399) PY 1511414.99 TB 10,831.00) (510.000.000,00) PY (544,403,000.00 TB (4401 000.00 50.00 PY $0.00 TB 0.00 50.00 PY SODOTB 000 $0.00 PY (S12.000.000,00) TB (12.000.000.00 (SX 105.000.00) PY (58,105 000 00) TB 0.00 (57.423,000.00) PY (57.423,000,00) TB 0.00 152.219,12065) PY (56590,483 64) TB 4,371,362.99 (5246,172,918 44) PY(5242,213.45285) TB 3.459 46556 54,497.583.20 PY 511,100,220 39 TB 6,602,637.69 51.100,281 48 PY $1158 128 47 TB 57.346.99 50.00 PY (51 476,08931) TB 426,09 31 (520430281) PY 15131146) TB 72.42135 $0.00 PY 152.16600000) TB 12.166.000.00 5141,549,221 61 PY 5130,196 64526 TB (11.372.576 35) 54,302.951 46 PY 54,240,263 09 TB 62,683 5897,140.01 PY SL036854.01 TS 119,714,00 $20397439 PY S210,502 50.TR 1:52.41 531,212,334 17 PY $528,870.44 TB 30.41.463.73) $133.000,00 PM 5446,000.00 TB 313 000 00 $4,633.383 82 PY 54.720,715 56 TB 87,33174 580,495 32 PY 599 332.45 TB 18.37.13 33 605,133.95 PY 54,913.224 45.78 13.090.49 51.622.425 99 PY $0.00 TB (1.622.425.99 5853.942.65 PY 536,105 92 TB (8171573) 561.12.04 PY $35,502 57 TB 25,6332 $135.642.99 PY 5137312 18. 1.68919 576,373.78 PY $52.599 02 TB 23.77476 512801121 PY 577.803 61 TB (50.22960 $17,023 27 PY 524.191 82 TB 7.868 55 51.550.919.06 PY $1,5778113 T 26822.79 $3.000.000.00 PY 53.630,3750 TB 630,3750 50.00 PY (5130,175 ) TB 330,375 52.603.435,87. Y $1.206,574.00 TB (0.1991 1897% 096 54096 1855% 3445 OS 100% 0 ON 1974 -IWE 1474 54 100 -35% 100% 16% 19 -98% 235% 24 23% 36% -1009 - 90% 19 46% 24 2145 100% -50%