The Maumee Corporation's August 31, 1999 financial statements are presented below.

Required: 

List deficiencies and omissions in the statements and discuss the prob- able effect of each deficiency or omission individually on the auditor's report. Assume that The Maumee Corporation is unwilling either to change the financial statements or to make additional disclosures. Organize your answers in two columns as follows within the general headings of Balance Sheet, Statement of Income and Retained Earnings, and Other:

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The Maumee Corporation Balance Sheet August 31, 1999 (in Thousands of Dollars) Assets Cash Marketable securities, at cost that approximates market value Trade accounts receivable (net of $65,000 Allowance for doubtful accounts) Inventories, at cost Property plant, and equipment Less accumulated depreciation Prepayments and other assets Total assets Liabilities and Stockholders' Equity Accounts payable Accrued taxes Bank loans and long-term debt Total liabilities Capital stock, $10 par value (authorized 50,000 shares, issued and outstanding 42,400 shares) Paid-in capital in excess of par value Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $ 103 54 917 775 $3,200 1,475 1,725 125 $3,699 $ 221 62 1,580 $1,863 $ 424 366 1,046 1,836 $3,699