ABC Company, Inc. Comparative Balance Sheets As of December 31, 2017 2016 Assets Current Assets Cash Marketable Securities Accounts Receivable Inventory Prepaid Expenses Total Current Assets $5,368 3,090 235,382 232,936 262,582210,434 2.870 2.590 $509,292$494,104 $6,574 1,570 Property, Plant & Equipment Land $4,52 78,54078,540 0 18,907 $4,300 ilding : Accumulated Depreciation Equipment Less: Accumulated Depreciation Total Property, Plant and Equipment 0 16,717 $63,291 $62,521 Total Assets $572,583 $556,625 Liabilities and Stockholders' Equity Current Liabilities Accounts Payable Accrued Expenses Income Tax Payable Current Portion L/T Debt Total Current Liabilities $224,235 $230,353 9,758 6,137 2,040 1,425 $239,033 $240,915 hensive Project in Auditing-Spring 2015 Long-Term Liabilities Mortgage Payable Bank Note Payable Total Long Term Liabilities $ 125,000 $ 128,000 55,000 65,00 $30,000 28,000 Total Llabilities Stockholder's Equity Common Stock ($1 Par) Retained Earnings Total Equity $269,033 $268,915 s 10,500 $ 10,000 293.050 277.710 $303,550 $287,710 Total Liabilities & Equity $572,583 $556,625 XYZ Company, Inc. Comparative Income Statements For The Years Ended Dec. 31, 2017 and Dec. 31, 2016 Income Sales 2012 2016 $2,102,358 100.0% $2,006,888 100.0% ost of Sales Beginning Inventory Purchases Other Costs Goods Available for Sale Less: Ending Inventory Cost of Sales 331,764 15.8 1,469,825 69.9 1,569,161 78.2 136,003 65 67.771 3.4 $1,937,592 92.2 $1,783,010 88.9 501.575 23.9 331.764 $1,436,017 68.3$1,451,246 72.4 146,078 7.3 566,341 31.7 955,642 27.6 Gross Profit Operating Expenses Advertising Auto&Truck Bad Debts Bank Charges Casual Labor Commissions Contributions $4,341 2 $7,4444 8,264 807 110 3,586 41,298 1,194 3,990 385 11,149 37,987 420 .6 1.8 2.0 Depreciation Dues & Subscriptions Entertainment Equipment Rent Fuel 16,658 1,925 10,181 6,601 13,133 50,788 2.4 38,346 1.8 4,299 11,688 1,911 41,124 12,711 19,246 4,533 238,67411.2 228,44411.4 10,097 3,643 19,269 14,119 8,981 3.165 7.885 $557,356 $108,985 13,636 1,480 2,287 5 10,119 nsurance Janitorial Service Leasing Legal& Accounting Miscellaneous Office Supplies 1,540 19,115 7,934 2,821 8,759 13,683 11,270 .6 1.0 2.0 -6 Repairs& Maintenance Salaries Shop Supplies Taxes-General 6,098 3,704 23,242 12,066 12,838 .2 1.2 .6 Taxes- Payroll Telephone Travel Utilities Total Operating Expenses Net Operating Income .4 26.5% 5.2% $486,708-24.2% $68,934 3.4% Other Income (Expense) Discounts Earned Discounts Allowed Interest Expense $1,695 1% (.2) (7,804)4) $2,915 (.2) (7,804) (3,385) $44,529 $64,456 Total Other Income (Expense) -_(21)-- $28,944 Net Income 3.1% $39,990 2.0% Grading Sheet 1 . Adjust sales to reflect GAAP (1 because cash has not been collected Calculate depreciation of prior accumulated depreciation 20% 25%) of current stated sales was not recorded. on all depreciable assets. There were no 80%, 90%) long term and 10% 15% 2. 20% 25% 3. Notes Payable should be adjusted to reflecn70 20% short term. . Inventory should be written down and adjusted for 10% 15% 20% s ash balance represent amount in three separate banks. Show full disclosure in the disclosure section December 31, 2017 Prepare and attach three negative and three positive accounts receivab 6. Prepare and attach bank confirmation of balances at the three banks as confirmations 8. Attach an Engagement letter 9. Attach a management representation letter. 10.Attach list of assets showing date of purchase, class, and depreciation amount ^^ ~r~inetances when compared to Question 6 a, b, c, d below ABC Company, Inc. Comparative Balance Sheets As of December 31, 2017 2016 Assets Current Assets Cash Marketable Securities Accounts Receivable Inventory Prepaid Expenses Total Current Assets $5,368 3,090 235,382 232,936 262,582210,434 2.870 2.590 $509,292$494,104 $6,574 1,570 Property, Plant & Equipment Land $4,52 78,54078,540 0 18,907 $4,300 ilding : Accumulated Depreciation Equipment Less: Accumulated Depreciation Total Property, Plant and Equipment 0 16,717 $63,291 $62,521 Total Assets $572,583 $556,625 Liabilities and Stockholders' Equity Current Liabilities Accounts Payable Accrued Expenses Income Tax Payable Current Portion L/T Debt Total Current Liabilities $224,235 $230,353 9,758 6,137 2,040 1,425 $239,033 $240,915 hensive Project in Auditing-Spring 2015 Long-Term Liabilities Mortgage Payable Bank Note Payable Total Long Term Liabilities $ 125,000 $ 128,000 55,000 65,00 $30,000 28,000 Total Llabilities Stockholder's Equity Common Stock ($1 Par) Retained Earnings Total Equity $269,033 $268,915 s 10,500 $ 10,000 293.050 277.710 $303,550 $287,710 Total Liabilities & Equity $572,583 $556,625 XYZ Company, Inc. Comparative Income Statements For The Years Ended Dec. 31, 2017 and Dec. 31, 2016 Income Sales 2012 2016 $2,102,358 100.0% $2,006,888 100.0% ost of Sales Beginning Inventory Purchases Other Costs Goods Available for Sale Less: Ending Inventory Cost of Sales 331,764 15.8 1,469,825 69.9 1,569,161 78.2 136,003 65 67.771 3.4 $1,937,592 92.2 $1,783,010 88.9 501.575 23.9 331.764 $1,436,017 68.3$1,451,246 72.4 146,078 7.3 566,341 31.7 955,642 27.6 Gross Profit Operating Expenses Advertising Auto&Truck Bad Debts Bank Charges Casual Labor Commissions Contributions $4,341 2 $7,4444 8,264 807 110 3,586 41,298 1,194 3,990 385 11,149 37,987 420 .6 1.8 2.0 Depreciation Dues & Subscriptions Entertainment Equipment Rent Fuel 16,658 1,925 10,181 6,601 13,133 50,788 2.4 38,346 1.8 4,299 11,688 1,911 41,124 12,711 19,246 4,533 238,67411.2 228,44411.4 10,097 3,643 19,269 14,119 8,981 3.165 7.885 $557,356 $108,985 13,636 1,480 2,287 5 10,119 nsurance Janitorial Service Leasing Legal& Accounting Miscellaneous Office Supplies 1,540 19,115 7,934 2,821 8,759 13,683 11,270 .6 1.0 2.0 -6 Repairs& Maintenance Salaries Shop Supplies Taxes-General 6,098 3,704 23,242 12,066 12,838 .2 1.2 .6 Taxes- Payroll Telephone Travel Utilities Total Operating Expenses Net Operating Income .4 26.5% 5.2% $486,708-24.2% $68,934 3.4% Other Income (Expense) Discounts Earned Discounts Allowed Interest Expense $1,695 1% (.2) (7,804)4) $2,915 (.2) (7,804) (3,385) $44,529 $64,456 Total Other Income (Expense) -_(21)-- $28,944 Net Income 3.1% $39,990 2.0% Grading Sheet 1 . Adjust sales to reflect GAAP (1 because cash has not been collected Calculate depreciation of prior accumulated depreciation 20% 25%) of current stated sales was not recorded. on all depreciable assets. There were no 80%, 90%) long term and 10% 15% 2. 20% 25% 3. Notes Payable should be adjusted to reflecn70 20% short term. . Inventory should be written down and adjusted for 10% 15% 20% s ash balance represent amount in three separate banks. Show full disclosure in the disclosure section December 31, 2017 Prepare and attach three negative and three positive accounts receivab 6. Prepare and attach bank confirmation of balances at the three banks as confirmations 8. Attach an Engagement letter 9. Attach a management representation letter. 10.Attach list of assets showing date of purchase, class, and depreciation amount ^^ ~r~inetances when compared to Question 6 a, b, c, d below