During 2020, Dang Inc. showed a large increase in gross profit on sales, as compared to recent prior years. Your audit senior asks you to figure out the most likely reason for this increase, given that sales had not increased very much from last year. Support your answer.
You find this information from Dang’s records:
2020 sales (at an average price of $50 a unit) were $2,300,000.
2020 purchases (at an average cost of $30 a unit) were $1,200,000.
The company uses the LIFO inventory method and has used it since 1978.
The answer has been presented in the supporting sheet. All the
parts has been solved with detailed explanation and calculation.
For detailed answer refer to the supporting sheet.
During 2020, Dang Inc. showed a large increase in gross profit on sales, as compared to...
QUESTION 2. During 2019, Smith Inc. showed a large increase in gross profit on sales, as compared to recent prior years. Your audit senior asks you to figure out the most likely reason for this increase, given that sales had not increased very much from last year. Support your answer. You find this information from Smith's records: 2019 sales (at an average price of $50 a unit) were $2,300,000. 2019 purchases (at an average cost of $30 a unit) were...
QUESTION 2. During 2019, Smith Inc. showed a large increase in gross profit on sales, as compared to recent prior years. Your audit senior asks you to figure out the most likely reason for this increase, given that sales had not increased very much from last year. Support your answer. You find this information from Smith's records: 2019 sales (at an average price of $50 a unit) were $2,300,000. 2019 purchases (at an average cost of $30 a unit) were...
2019 Audit of Beta Industries: Summary
Information
Assume you are an audit manager, today is May 15, 2019, and your
public accounting firm is currently planning the 2019 financial
statement audit of Beta Home Goods, a retailer in the home goods
and supply industry. Beta is a public company with a 12/31
year-end, and a new client for your firm. The audit partner has
asked you to help plan the audit for this new client using the
following information obtained...
Case Study Analysis: Fred Stern & Company, Inc. (Knapp): In the business world of the Roaring Twenties, the schemes and scams of flimflam artists and confidence men were legendary. The absence of a strong regulatory system at the federal level to police the securities markets—the Securities and Exchange Commission was not established until 1934—aided, if not encouraged, financial frauds of all types. In all likelihood, the majority of individuals involved in business during the 1920s were scrupulously honest. Nevertheless, the...
Question 1: Wendy's Happy Homes Inc manufactures Home Appliances. Monthly sales of Wendy's Washers and Dryer Sets for a nine month period were as follows: MONTH Washer and Dryer Sales 490 480 450 500 480 470 490 520 530 January February March April May June July August September Forecast October sales using 1) A four-month moving average 2) a six-month moving average 3. Compute the MAD for each forecast method you used Actual October sales were 320 nits. 4) Which...
Refer to Harrisons’ Income Statement data which is located in
Appendix B to the Partner’s Memo and record your answers to the
following questions:
Perform analytical procedures for the completeness assertion of
advertising expense, security expense and bad debts expense and
indicate whether you believe that there is a concern about material
misstatements in each accoun
Suggest an appropriate substantive procedure to test the
completeness of security expense.
Monet & Associates Memo To: Dean Smith (Audit Senior) From: Vince Mater...
Young Brands OUNG BRANDS (YB) is a manufacturer of sports clothing and team uniforms. Its industry is quite competitive, so the management team has attempted to operate a modern operation with state-of-the-art production facilities. Careful cost management has been an important factor in attaining profits. YB is considered a leader for its fashion sense, pricing, market- ing, and product quality. Professional and university-team uniforms and affiliated products are sold by company salesmen to teams and to retail stores throughout North...
Under Armour Inc. shares fell nearly 19 after the company confirmed it was the subject of a federal Investigation into its accounting practices. Executives declined on an earnings call Monday to provide details about the probe or explain why Under Armour hadn't previously disclosed its existence, even though they had been responding to document requests for more than two years "We have been fully operating with these inquiries for nearly 2 Under Armour CFO David Bergman said. "We firmly believe...
Operations Brony’s Bikes was incorporated more than 30 years ago to manufacture ten-speed touring bikes. An exercise bike and mountain bikes later added to the product line. Currently, the company manufactures the following products: Grand Prix: Ten-speed touring bike Phoenix: Deluxe eighteen-speed racing bike Pike’s Peak: Twelve-speed mountain bike Himalaya: Eighteen-speed deluxe mountain bike Waistliner: Stationary exercise bike All of these products are manufactured in a single facility, which is located in eastern Texas. Derailleurs (front and rear) comprise a...
8. Which of the following accounts has a normal debit balance? a. Accounts Payable b. Sales Returns and Allowances c. Sales d. Interest Revenue 9. Using a perpetual inventory system, the entry to record the purchase of $30,000 of merchandise on account would include a a. debit to Sales b. debit to Merchandise Inventory c. credit to Merchandise Inventory d. credit to Sales 10. A retailer purchases merchandise with a catalog list price of $15,000. The retailer receives a 30%...