(Objective 7-4) As auditor of the Star Manufacturing Company, you have obtained
a. A trial balance taken from the books of Star one month before year-end:
Dr. (Cr.)
Dr. (Cr.)
Cash in bank
$ 87,000
Mortgages payable
(400,000 )
Trade accounts receivable
345,000
Capital stock
(300,000 )
Notes receivable
125,000
Retained earnings
(510,000 )
Inventories
317,000
Sales
(3,130,000 )
Land
66,000
Cost of sales
2,300,000
Buildings, net
350,000
General and administrative expenses
622,000
Furniture, fixtures, and equipment, net
325,000
Legal and professional fees
3,000
Trade accounts payable
(235,000)
Interest expense
35,000
b. There are no inventories consigned either in or out.
c. All notes receivable are due from outsiders and held by Star.
Which accounts should be confirmed with outside sources? Briefly describe from whom they should be confirmed and the information that should be confirmed. Organize your answer in the following format:*
| From Whom | Information to Be |
Account Name | Confirmed | Confirmed |
Objective 7-4
Identify and apply the eight types of evidence used in auditing.
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