All of Kola Company's sales are credit sales shipped free on board (FOB) shipping point. Kola...

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All of Kola Company's sales are credit sales shipped free on board (FOB) shipping point. Kola typically records sales transactions (that is, sales and cost of sales) throughout the year on the billing date. The internal auditor gathered the following information and documented it in his working papers. Invoice Number 8351 8352 8353 8354 Date Shipped 12/28/2015 12/29/2015 1/2/2016 1/2/2016 Date Billed 12/29/2015 1/2/2016 12/31/2015 1/3/2016 a. Describe the specific audit procedures that should be performed to determine whether sales transactions occurring immediately before and after year-end are recorded in the proper period. b. Record the adjusting journal entries (ignore dollar amounts) the internal auditor should propose based on the cutoff information documented above. Include a clear and concise explanation for each proposed entry. All of Kola Company's sales are credit sales shipped free on board (FOB) shipping point. Kola typically records sales transactions (that is, sales and cost of sales) throughout the year on the billing date. The internal auditor gathered the following information and documented it in his working papers. Invoice Number 8351 8352 8353 8354 Date Shipped 12/28/2015 12/29/2015 1/2/2016 1/2/2016 Date Billed 12/29/2015 1/2/2016 12/31/2015 1/3/2016 a. Describe the specific audit procedures that should be performed to determine whether sales transactions occurring immediately before and after year-end are recorded in the proper period. b. Record the adjusting journal entries (ignore dollar amounts) the internal auditor should propose based on the cutoff information documented above. Include a clear and concise explanation for each proposed entry.

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SOLUTION a Audit Procedures for Proper Period Recording To determine whether sales transactions occurring immediately before and after yearend are rec... View the full answer