Note: Check No, 2034 not listed because it was issued on 1/1 year 6 . Staff prepared the following schedule of transfers from the General Account to the Special Account. 1. Agreed all disbursements to cash disbursements journal and bank statement (date, check no. amount, payee), No exceptions noted. 2. Agreed all cash receipts to cash receipts joumal and bank statement (date, check no, amount, payee). No exceptions noted. Document Review Simulation 10-46 (Static) [LO 10-6] This simulation presents the Keystone Computers \& Networks, Incorporated (Keystone) Cash Work Memo for the general account and petty cash prepared by two members of your audit team-your responsibility is to evaluate various statements included in that document, considering the various exhibits. Background financial and other information on Keystone is included in Appendix 6C of Chapter 6 The controller of Keystone Computers \& Networks Incorporated (Keystone), a nonissuer, prepared six exhibits relating to Keystone's General Account cash position at year 5 year-end. A new audit assistant with your CPA firm has begun the audit of cash-but has a number of questions and comments based on a quick examination of the exhibits, now included in the working papers, and a discussion of some matters with the controller of Keystone. Required: each of the sentences called out in the points on the cocument, determine if the current language is appropriate as is, should be removed altogether, or replaced with any of the provided alternatives. Links to each of the exhibits are provided in the document, but are avallable in the list below for convenience. 7. "No further audit response is necessary related to check 2027 , Retain the original text. Delete entire point 7. Replace with "We should perform further procedures to determine why the account reconciliation excludes this item, which should be listed as a deposit in transit as of year-end." Replace with "We should perform further procedures to determine why the account reconciliation excludes this item, which should be listed as an outstanding check as of yearend." Replace with "We should propose an adjusting entry recording the disbursement in December." 8. "Check 2032 appears to result in the cash being recorded in both accounts per books as of year-end and thus overstates total cash by $1,500 at year-end " Retain the original text. Delete entire point 8. Replace with "The transaction related to Check 2032 is either a deposit or a withdrawal; it can't be both." Replace with "Check 2032 appears to result in the cash being recorded in both accounts per books as of year-end and thus overstates total cash by $3,000 at year-end." Replace with "Check 2032 is recorded in the general account per bank in year 6 ; thus it understates total cash by $1,500 at yearend." 5. Outstanding Checks (Exhibit 5) and Bank Transfer Schedule (Exhibit 6). Check 2034 from the bank transfer schedule was omitte from the list of outstanding checks. This is because it was not written untit 1/1/year 6 . (Callout $5 ) 6. Outstanding Checks (Exhibit 5): The long-outstanding check for \$200 will probably never be cashed as the company has otterripted to communicate with the payee and falled. Because the state does not require submission of such funds, we should suggest to the client that the $200 check be deleted from the outstanding check list, no adjusting journal entry seems necessary. (Callout "6) 7. Outstanding Checks (Exhibit 5) Keystone's first bank statement in year 6 included check 2027 dated on 12/30 for $1,500 to Jenco Corp. I found the check to be properly recorded in the cash disbursements joumal as of 12/30/year5 No further audit response is necessary related to check 2027 . (Callout " 7 ) 8. Baink Transfer Schedute (Exhibit 6) Check 2032 oppears to result in the cash belag recorded in both accounts per books as of year-end and thus overstotes total cash by $1,500 of year-end (Callout $8 ) This simulation presents the Keystone Computers \& Networks, Incorporated (Keystone) Cash Work Memo for the general account and petty cash prepared by two members of your audit team-your responsibility is to evaluate various statements included in that document, considering the varlous exhibits. Background financial and other information on Keystone is included in Appendix 6C of Chapter 6. The controller of Keystone Computers \& Networks Incorporated (Keystone), a nonlssuer, prepared s/x exhibits relating to Keystone's General Account cash position at year 5 year-end. A new oudit assistant with your CPA firm has begun the audit of cash but has a number of questions and comments bosed on a quick examination of the exhibits, now included in the working papers, and a discussion of some motters with the controller of Keystone. Required: Required: Your as senior on the engagement is to review the various points made by the assistant, including consideration of the exhibits. For each of the sentences called out in the points on the document, determine if the current language is oppropriate as is, should be removed altogether, or replaced with any of the provided alternatives. Links to each of the exhibits are provided in the document, but are avallable in the list below for convenience. Exhibit 1 -At year-end, $41 of cash and a receipt for $9.00 for postage. Siaff Associate. Exhibit 2 5. "This is because it was not written until 1/1/ year 6 " Retain the original text. Delete entire point 5. Replace with "This is because it was written in year 4." Replace with "But since the bank transfer schedule shows that it was received on 12/31/ year 5 in the special account, we should investigate this transaction further." Replace with "This represents a proper deposit in transit for the special account as of 12/31/ year 5 ." 6. " be deleted from the outstanding check list: no adjusting joumal entry seems necessary. Retain the original text. Delete entire point 6 . Replace with "be deleted from the check list, with a possible adjusting journal entry proposed debiting cash and crediting a miscellaneous revenue type account." Replace with "be deleted from the check list, with a debit to bad debt expense and a credit to cash." Replace with "remain on the list of outstanding checks until cashed to keep the account in balance." Replace with "is required to be reissued to a satisfactory charity for disbursement." Note: Check No, 2034 not listed because it was issued on 1/1 year 6 . Staff prepared the following schedule of transfers from the General Account to the Special Account. 1. Agreed all disbursements to cash disbursements journal and bank statement (date, check no. amount, payee), No exceptions noted. 2. Agreed all cash receipts to cash receipts joumal and bank statement (date, check no, amount, payee). No exceptions noted. Document Review Simulation 10-46 (Static) [LO 10-6] This simulation presents the Keystone Computers \& Networks, Incorporated (Keystone) Cash Work Memo for the general account and petty cash prepared by two members of your audit team-your responsibility is to evaluate various statements included in that document, considering the various exhibits. Background financial and other information on Keystone is included in Appendix 6C of Chapter 6 The controller of Keystone Computers \& Networks Incorporated (Keystone), a nonissuer, prepared six exhibits relating to Keystone's General Account cash position at year 5 year-end. A new audit assistant with your CPA firm has begun the audit of cash-but has a number of questions and comments based on a quick examination of the exhibits, now included in the working papers, and a discussion of some matters with the controller of Keystone. Required: each of the sentences called out in the points on the cocument, determine if the current language is appropriate as is, should be removed altogether, or replaced with any of the provided alternatives. Links to each of the exhibits are provided in the document, but are avallable in the list below for convenience. 7. "No further audit response is necessary related to check 2027 , Retain the original text. Delete entire point 7. Replace with "We should perform further procedures to determine why the account reconciliation excludes this item, which should be listed as a deposit in transit as of year-end." Replace with "We should perform further procedures to determine why the account reconciliation excludes this item, which should be listed as an outstanding check as of yearend." Replace with "We should propose an adjusting entry recording the disbursement in December." 8. "Check 2032 appears to result in the cash being recorded in both accounts per books as of year-end and thus overstates total cash by $1,500 at year-end " Retain the original text. Delete entire point 8. Replace with "The transaction related to Check 2032 is either a deposit or a withdrawal; it can't be both." Replace with "Check 2032 appears to result in the cash being recorded in both accounts per books as of year-end and thus overstates total cash by $3,000 at year-end." Replace with "Check 2032 is recorded in the general account per bank in year 6 ; thus it understates total cash by $1,500 at yearend." 5. Outstanding Checks (Exhibit 5) and Bank Transfer Schedule (Exhibit 6). Check 2034 from the bank transfer schedule was omitte from the list of outstanding checks. This is because it was not written untit 1/1/year 6 . (Callout $5 ) 6. Outstanding Checks (Exhibit 5): The long-outstanding check for \$200 will probably never be cashed as the company has otterripted to communicate with the payee and falled. Because the state does not require submission of such funds, we should suggest to the client that the $200 check be deleted from the outstanding check list, no adjusting journal entry seems necessary. (Callout "6) 7. Outstanding Checks (Exhibit 5) Keystone's first bank statement in year 6 included check 2027 dated on 12/30 for $1,500 to Jenco Corp. I found the check to be properly recorded in the cash disbursements joumal as of 12/30/year5 No further audit response is necessary related to check 2027 . (Callout " 7 ) 8. Baink Transfer Schedute (Exhibit 6) Check 2032 oppears to result in the cash belag recorded in both accounts per books as of year-end and thus overstotes total cash by $1,500 of year-end (Callout $8 ) This simulation presents the Keystone Computers \& Networks, Incorporated (Keystone) Cash Work Memo for the general account and petty cash prepared by two members of your audit team-your responsibility is to evaluate various statements included in that document, considering the varlous exhibits. Background financial and other information on Keystone is included in Appendix 6C of Chapter 6. The controller of Keystone Computers \& Networks Incorporated (Keystone), a nonlssuer, prepared s/x exhibits relating to Keystone's General Account cash position at year 5 year-end. A new oudit assistant with your CPA firm has begun the audit of cash but has a number of questions and comments bosed on a quick examination of the exhibits, now included in the working papers, and a discussion of some motters with the controller of Keystone. Required: Required: Your as senior on the engagement is to review the various points made by the assistant, including consideration of the exhibits. For each of the sentences called out in the points on the document, determine if the current language is oppropriate as is, should be removed altogether, or replaced with any of the provided alternatives. Links to each of the exhibits are provided in the document, but are avallable in the list below for convenience. Exhibit 1 -At year-end, $41 of cash and a receipt for $9.00 for postage. Siaff Associate. Exhibit 2 5. "This is because it was not written until 1/1/ year 6 " Retain the original text. Delete entire point 5. Replace with "This is because it was written in year 4." Replace with "But since the bank transfer schedule shows that it was received on 12/31/ year 5 in the special account, we should investigate this transaction further." Replace with "This represents a proper deposit in transit for the special account as of 12/31/ year 5 ." 6. " be deleted from the outstanding check list: no adjusting joumal entry seems necessary. Retain the original text. Delete entire point 6 . Replace with "be deleted from the check list, with a possible adjusting journal entry proposed debiting cash and crediting a miscellaneous revenue type account." Replace with "be deleted from the check list, with a debit to bad debt expense and a credit to cash." Replace with "remain on the list of outstanding checks until cashed to keep the account in balance." Replace with "is required to be reissued to a satisfactory charity for disbursement