Nesbit Inc, a manufacturer of boat parts. During its annual audit for the year ended December...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Nesbit Inc, a manufacturer of boat parts. During its annual audit for the year ended December 31, 2021, the auditors found the following transactions: 1. A customer custom ordered a part that was finished and ready for shipment on December 27, 2021. The customer was billed on that day. The machine was segregated in the back of the shipping room on December 31, 2021 waiting to be shipped to the customer and thus was not included in the physical count. 2. Parts ordered by Nesbit, Inc were received on January 3, 2022 and the related invoice was recorded on January 5, 2022. The invoice shows that the shipment was made on December 29, 2021, f.o.b. shipping point. The parts were not included in the physical count. 3. The same as above, but the parts were included in the physical count. 4. A customer's order was in the shipping room when the physical count was taken. It was not included in the inventory because it was marked "Holding for shipping instructions". Your investigation revealed that the customer's order was dated December 18, 2021 and the order was shipped and billed to the customer on January 5, 2022. Instructions: Assuming that each of the amounts is material, indicate below the effect the above transactions will have on the below elements of the Company's financial statements, if not corrected. Use the following for each space for each transaction-O for overstated, U for understated, and NE for no effect. 1234 Accounts Receivable ACC 320 Inventory Errors 0222 NE NE NE Inventory U NE U COGS NE U Accounts Payable NE U U NE Sales NE NE NE Nesbit Inc, a manufacturer of boat parts. During its annual audit for the year ended December 31, 2021, the auditors found the following transactions: 1. A customer custom ordered a part that was finished and ready for shipment on December 27, 2021. The customer was billed on that day. The machine was segregated in the back of the shipping room on December 31, 2021 waiting to be shipped to the customer and thus was not included in the physical count. 2. Parts ordered by Nesbit, Inc were received on January 3, 2022 and the related invoice was recorded on January 5, 2022. The invoice shows that the shipment was made on December 29, 2021, f.o.b. shipping point. The parts were not included in the physical count. 3. The same as above, but the parts were included in the physical count. 4. A customer's order was in the shipping room when the physical count was taken. It was not included in the inventory because it was marked "Holding for shipping instructions". Your investigation revealed that the customer's order was dated December 18, 2021 and the order was shipped and billed to the customer on January 5, 2022. Instructions: Assuming that each of the amounts is material, indicate below the effect the above transactions will have on the below elements of the Company's financial statements, if not corrected. Use the following for each space for each transaction-O for overstated, U for understated, and NE for no effect. 1234 Accounts Receivable ACC 320 Inventory Errors 0222 NE NE NE Inventory U NE U COGS NE U Accounts Payable NE U U NE Sales NE NE NE
Expert Answer:
Answer rating: 100% (QA)
1 Order was received during the year and customer was billed also during the year However the machine was not shipped during the year and thus ownersh... View the full answer
Related Book For
Auditing A Practical Approach with Data Analytics
ISBN: 978-1119401742
1st edition
Authors: Raymond N. Johnson, Laura Davis Wiley, Robyn Moroney, Fiona Campbell, Jane Hamilton
Posted Date:
Students also viewed these accounting questions
-
In its income statement for the year ended December 31, 2010, Maris Company reported the following condensed data. Instructions (a) Prepare a multiple-step income statement. (b) Calculate the profit...
-
The following data relate to inventory for the year ended December 31, 2009. A physical inventory on December 31, 2009, indicates that 600 units are on hand and that they came from the July 1...
-
In its income statement for the year ended December 31, 2014, Michael Company reported the following condensed data. Instructions (a) Prepare a multiple-step income statement. (b) Prepare a...
-
The data in the chart below is for the distance (in cm) to the near point, the point nearest the eye at which the eye can accurately focus, at a persons age. Age (years) Near Point (cm) 10 7.5 20 9...
-
Riverdale Printing Company prints limited edition art books with production runs of 15,000 to 100,000. It has recently adopted an activity-based costing system to assign manufacturing overhead to...
-
The standard angle of a V-belt is (a) 30 (b) 35 (c) 40 (d) 45
-
What is a System Deployment Concept? Identify examples of its UCs.
-
On January 1, 2011, Frog Corporation sold a $2,000,000, 10 percent bond issue (8.5 percent market rate). The bonds were dated January 1, 2011, pay interest each June 30 and December 31, and mature in...
-
how to make a simple text editor on compiler in java using queue,stack ,arraylist,linklist that do operations such as inserting, deleting, undoing, and redoing changes and stack for undo but not...
-
Dominique Fouque owns and operates Dominique's Doll House. She has a small shop in which she sells new and antique dolls. She is particularly well known for her collection of antique Ken and Barbie...
-
Using your own words, explain the role of the bounds register and describe in your own words the role of the relocation register. Your response should be at least a half page. Give an example for...
-
People management is complex and involves a wide range of skills. What are the most important skills to work on right now, to become a more effective manager? How can someone apply "learn today,...
-
Triangular Chemicals has total assets of $96 million, a return on equity of 36 percent, a net profit margin of 4.9 percent, and an equity multiplier of 2.81. How much are the firm's sales? The...
-
Alejandro Associates is an accounting firm that provides audit and tax services to its clients. Each tax return is considered a "job" for the firm, just like a manufacturing company considers a...
-
Castile Inc. had a beginning balance of $2,200 in its Accounts Receivable account. The ending balance of Accounts Receivable was $2,800. During the period, Castile recognized $42,000 of revenue on...
-
On January 1, 2025, Tamarisk Company purchased 11% bonds having a maturity value of $312,000 for $336,270.95. The bonis provide the bondholders with a 9% yield. They are dated January 1, 2025, and...
-
Pastina Company sells various types of pasta to grocery chains as private label brands. The company's reporting year-end is December 31. The unadjusted trial balance as of December 31, 2021, appears...
-
-4 1 9. Let A = Find A-1, (A") and verify that (A")= (A-1)".
-
AU-C 260 stresses the importance of communication with those charged with governance. Who are those charged with governance? Discuss why it is important that the auditor communicate with them (and...
-
Part I: The common stock of Wilson, Inc. is owned by 10,000 stockholders who live in several states. Wilsons financial statements as of December 31, 2021, were audited by Doe & Co., CPAs, who...
-
How might the risk of material misstatement in the revenue process differ for a manufacturer of oil and gas field machinery equipment and a retail grocer?
-
Sketch a simple common-gate amplifier circuit and discuss the general ac circuit characteristics (voltage gain and output resistance).
-
How does the transistor width-to-length ratio affect the small-signal voltage gain of a common-source amplifier?
-
Sketch a simple source-follower amplifier circuit and discuss the general ac circuit characteristics (voltage gain and output resistance).
Study smarter with the SolutionInn App