Financial statement information about four different companies is as follows

ACC 557 Week 1 Assignment

P1–5A Financial statement information about four different companies is as follows.

Instructions
(a) Determine the missing amounts. (Hint: For example, to solve for (a), Assets _ Liabilities _ Stockholders’ Equity _ $45,000.)
(b) Prepare the retained earnings statement for Yates Company. Assume beginning retained earnings was $20,000.
(c) Write a memorandum explaining the sequence for preparing financial statements and the interrelationship of the retained earnings statement to the income statement and balance sheet.

Karma Yates McCain Dench
Company Company Company Company
January 1, 2008
Assets $ 95,000 $110,000 (g) $170,000
Liabilities 50,000 (d) 75,000 ( j)
Stockholders’ equity (a) 60,000 45,000 90,000
December 31, 2008
Assets (b) 137,000 200,000 (k)
Liabilities 55,000 75,000 (h) 80,000
Stockholders’ equity 60,000 (e) 130,000 170,000
Stockholders’ equity changes in year
Additional investment (c) 15,000 10,000 15,000
Dividends 25,000 (f) 14,000 20,000
Total revenues 350,000 420,000 (i) 520,000
Total expenses 320,000 385,000 342,000 (l)

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Sam is a senior auditor on the integrated audit of the Patriots Dynasty Corporation and is in charge of designing tests for the ICFR and financial statement audits

Problem 13-31 Sam is a senior auditor on the integrated audit of the Patriots Dynasty Corporation and is in charge of designing tests for the ICFR and financial statement audits. You are the staff auditor on the engagement. Sam asks you to make a start on the audit program for the human resources and payroll tests.

Required: Create a chart with two columns. Column A (shown below) lists different types of tests the team can utilize for testing ICFR and financial statement audits. In Column B give one example for each type of test listed in Column (a).

Column A Column B
Tests of controls for human resources transactions
Tests of controls for payroll cash disbursements
Dual purpose tests for human resources transactions
Dual purpose tests for payroll disbursements
Substantive analytical procedures for payroll-related expenses
Substantive analytical procedures for payroll-related liabilities
Tests of details of balances for payroll-related expenses
Tests of details of balances for payroll-related liabilities


Click here for the solution: Sam is a senior auditor on the integrated audit of the Patriots Dynasty Corporation and is in charge of designing tests for the ICFR and financial statement audits