The balance sheet and income statement for ABC Company for the years 2015 and 2016 are...

 

Transcribed Image Text:

The balance sheet and income statement for ABC Company for the years 2015 and 2016 are as follows: <> BALANCE SHEET 2015 2016 S 460 $ 300 Cash Accounts receivable 620 480 Inventory 1,000 730 Total assets $2,080 $1,510 Accounts payable $ 580 $ 310 Notes payable 500 100 Common stock 400 400 Retained earnings 600 700 Total liabilities and $2,080 $1,510 stockholders' equity Income Statement Net sales S 550 $ 840 Cost of goods sold 120 160 Gross margin $ 430 $ 680 Expenses: Salaries S 100 $ 150 Warehousing costs 80 120 Advertising 60 90 Тахes 45 75 Total expenses $ 285 $ 435 Net income $ 145 $ 245 Question 1. Perform vertical and/or horizontal analysis of the statements and identify two things that appear to be unusual and could be possible symptoms of fraud. The balance sheet and income statement for ABC Company for the years 2015 and 2016 are as follows: <> BALANCE SHEET 2015 2016 S 460 $ 300 Cash Accounts receivable 620 480 Inventory 1,000 730 Total assets $2,080 $1,510 Accounts payable $ 580 $ 310 Notes payable 500 100 Common stock 400 400 Retained earnings 600 700 Total liabilities and $2,080 $1,510 stockholders' equity Income Statement Net sales S 550 $ 840 Cost of goods sold 120 160 Gross margin $ 430 $ 680 Expenses: Salaries S 100 $ 150 Warehousing costs 80 120 Advertising 60 90 Тахes 45 75 Total expenses $ 285 $ 435 Net income $ 145 $ 245 Question 1. Perform vertical and/or horizontal analysis of the statements and identify two things that appear to be unusual and could be possible symptoms of fraud.

Answer rating: 100% (QA)

Things that appears to be unusual as a possible symptoms of frauds are 1 Increased ... View the full answer