Would it be considered unusual to find debits to fixed assets coming from a journal entry source

1. Would it be considered unusual to find debits to fixed assets coming from a journal entry source rather than a purchase journal? Explain.

2. Would it be normal to find entries to accumulated depreciation and depreciation expense to come from a journal entry source rather than another source?

3. Assume you were auditing FedEx and in your sample of debits to fixed assets, you find an entry for $500,000 with the following notation: "Capitalization of line capacity per CFO, amounts were originally in corrected recorded as an expense." Explain what you would do to complete the audit of this item. What evidence would you need to see to either corroborate or question the entry?


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Comprehensive Problem 2 (CP2): Guitar Universe, Inc., is a popular source of musical instruments for professional and amateur musicians

COMPREHENSIVE PROBLEM 2 (CP2): Guitar Universe, Inc

Guitar Universe, Inc., is a popular source of musical instruments for professional and amateur musicians. The company's accountants make necessary adjusting entries monthly, and they make all closing entries annually. Guitar Universe is growing rapidly and prides itself on having no long-term liabilities.

The company has provided the following trial balance dated December 31, 2009:

AND SO ON


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