For this exercise, your client, Bright IDEAs Inc., has provided you with a listing of inventory as of year end, which includes current selling prices. To test whether profit margins appear adequate to justify the inventory valuation provision, the auditor must complete a series of related steps:

1. Import the clients database of inventory on hand. You may have already completed this step in

2. Create an analysis of selling price changes by following the instructions in the IDEA Workbook.

3. Create an analysis of profit margins by following the instructions in the IDEA Workbook.

Required Data Files: IDEA Data Analysis Workbook

Inventory 2015.asc

Required: Complete all of the related steps shown above using IDEA. After completing each step, answer the following questions. (Enter your answers exactly as they appear in IDEA.)

a. Upon importing the Inventory 2015.asc data file, what is the total Number of Records shown by IDEA? What is the Control Total "Net Value" for the TOTALCOST Field shown by IDEA?

Total Number of Records shown by IDEA
Control Total "Net Value" for the TOTALCOST Field shown by IDEA

b-1. What percentage of inventory items have price movements in excess of 50%?

b-2. How many of these items experienced price increases?

b-3. How many of these items experienced price decreases?

b-4. Which direction of change would be most concerning to the auditor: a price increase or a price decrease?

b-1.	Percentage of inventory items have price movements in excess of 50%		%
b-2.	Total number of items that experienced price increases
b-3.	Total number of items that experienced price deceases
b-4.	Would a price increase or a price decrease be more concerning to an auditor?

c. What percentage of inventory items have negative profit margins?

Percentage of inventory items with negative profit margins ______ %