As auditor of the Star Manufacturing Company, you have obtained a. A trial balance taken from the

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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.)
Cash in bank .............. $ 87,000
Trade accounts receivable ......... 345,000
Notes receivable ............ 125,000
Inventories .............. 317,000
Land ................. 66,000
Buildings, net ............. 350,000
Furniture, fixtures, and equipment, net ... 325,000
Trade accounts payable .......... (235,000)
Mortgages payable ........... (400,000)
Capital stock .............. (300,000)
Retained earnings ............ (510,000)
Sales ................. (3,130,000)
Cost of sales .............. 2,300,000
General and administrative expenses ..... 622,000
Legal and professional fees ....... 3,000
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 followingformat:*
As auditor of the Star Manufacturing Company, you have obtained
Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive...
Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
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Auditing and Assurance services an integrated approach

ISBN: 978-0132575959

14th Edition

Authors: Alvin a. arens, Randal j. elder, Mark s. Beasley

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