An engagement team is performing the audit of the financial statements of Griffin, Inc. as of...

   

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An engagement team is performing the audit of the financial statements of Griffin, Inc. as of and for the year ended December 31, year 7. Task 1: The senior accountant has identified three misstatements that have been carried forward onto the summary of proposed audit adjustments. Determine the impact of the identified misstatements on the financial statement ratios noted below. For each of the identified misstatements below, indicate the impact on the financial ratio identified. In columns D and E, select the impact, if any, that the misstatement has on the financial ratio from the option list. Selections used once, more than once, or are not at all. Consider each misstatement independently. Choices for Columns D and E: Decrease O Increase O No impact T A Account 2 Payroll expense 3 Accrued payroll 4 5 Depreciation expense Accumulated depreciation 7 8 Prepaid insurance 9 Insurance expense B Debit 72,000 125,000 15,000 C Credit 72,000 125,000 15,000 D Impact on current ratio Impact on profit margin An engagement team is performing the audit of the financial statements of Griffin, Inc. as of and for the year ended December 31, year 7. Task 1: The senior accountant has identified three misstatements that have been carried forward onto the summary of proposed audit adjustments. Determine the impact of the identified misstatements on the financial statement ratios noted below. For each of the identified misstatements below, indicate the impact on the financial ratio identified. In columns D and E, select the impact, if any, that the misstatement has on the financial ratio from the option list. Selections used once, more than once, or are not at all. Consider each misstatement independently. Choices for Columns D and E: Decrease O Increase O No impact T A Account 2 Payroll expense 3 Accrued payroll 4 5 Depreciation expense Accumulated depreciation 7 8 Prepaid insurance 9 Insurance expense B Debit 72,000 125,000 15,000 C Credit 72,000 125,000 15,000 D Impact on current ratio Impact on profit margin

Answer rating: 100% (QA)

Answer Solution SrNo Impact on Current Ratio Impact on Profit Mar... View the full answer